Households could face a sharp rise in energy bills later this year as the surge in oil prices feeds through to consumer costs.
Analysts at Citigroup warned the UK energy price cap set by Ofgem could climb to around £1,985 by July — an increase of roughly £344 for the average household.
The bank said such a rise would likely prompt political pressure for government intervention to protect households from higher costs.
Keir Starmer suggested support could be considered if the crisis persists, saying helping working families cope with the cost of living remains a priority.
Citigroup estimated that shielding households from the worst of the price rises could cost between £5.9bn and £6.4bn per year.
Under the current cap, average annual bills are expected to fall to £1,641 from April. However, Citi forecasts that prices may not return to that level until the second quarter of 2028 if the Middle East crisis continues to drive energy costs higher.
Analysts said the surge in Brent crude above $100 a barrel has “meaningfully changed the fiscal maths”, warning that any government support measures could reduce the budget headroom available to Rachel Reeves and increase public borrowing.
