UK energy price cap set to edge up in October

21 August 2025

Household energy bills are expected to rise slightly this winter, with Cornwall Insight forecasting Ofgem’s price cap will increase to £1,737 a year for a typical dual-fuel household.

The consultancy’s final forecast, published after the observation window closed on 18 August, points to a £17 or 1% rise from the current level of £1,720. Ofgem will confirm the official cap on 27 August.

The projection includes the expansion of the government’s Warm Home Discount, which will add around £15 to annual bills while providing £150 in support to 2.7 million vulnerable households. Other modelling adjustments have also been factored into the forecast.

Wholesale energy markets have been volatile in recent months. Gas prices spiked in June after Israeli airstrikes on Iran raised concerns over supply, before easing as fears subsided. European Union moves to relax gas storage requirements further contributed to falling prices.

Cornwall Insight expects a small reduction in the cap in January, though this remains dependent on geopolitics, weather and policy changes.

Dr Craig Lowrey, principal consultant at Cornwall Insight says the rise highlights how the cap reflects wider costs as well as market prices, with long-term relief likely to depend on investment in clean energy.

“The real hope for lasting relief lies in the longer-term transition towards clean power and energy independence, which offers the greatest prospect of both stability and lower costs. But there’s no sugarcoating it, this transition won’t be instant or effortless and will see costs incurred as a result. It will require adaptation and significant upfront investment – every change in the energy landscape comes with trade-offs. Yet for all the challenges, the long-term reward could be a more sustainable and affordable energy system for generations to come.”