UK households are set to face a sharp rise in energy costs after Ofgem increased the energy price cap by 13% amid soaring wholesale oil and gas prices linked to the conflict in Iran.
The regulator said the annual bill for a typical household paying by direct debit will rise by £221 to £1,862 between July 1 and September 30.
The increase exceeded expectations from analysts at Cornwall Insight, who had forecast a rise of around £209.
It marks the first major direct impact of the Iran conflict on UK household energy bills, as escalating tensions in the Middle East continue to disrupt global energy markets.
Oil prices have climbed by more than a third since the conflict involving the US, Iran and Israel intensified in late February, with Brent crude currently trading near US$98 per barrel.
The sharp rise has been driven by attacks on Gulf energy infrastructure and ongoing disruption around the Strait of Hormuz, the strategic shipping route that normally handles around one-fifth of global oil and gas exports.
Households had previously benefited from a reduction in the April energy cap after Chancellor Rachel Reeves removed certain green levies from domestic bills, temporarily lowering average annual costs by £117.
The new cap applies to average unit rates and standing charges rather than total bills, meaning actual household costs will still depend on energy consumption levels.
