Britain energy price cap forecast to rise 13% in summer

The household energy price cap in Britain is forecast to rise by 13 percent this summer, adding approximately 209 pounds to annual bills for a typical dual-fuel household. The increase, which would bring the cap to 1,850 pounds from July, is driven by higher wholesale energy prices linked to conflict in the Middle East.

The prediction from energy consultancy Cornwall Insight represents its final forecast before the official announcement by regulator Ofgem on May 27. The cap, which sets maximum unit rates and standing charges for customers on standard variable tariffs, is adjusted every three months based on wholesale prices observed during a preceding period. The current cap is 1,641 pounds per year.

Analysts said wholesale gas and electricity prices climbed sharply in February and March following military actions that damaged energy infrastructure in the Gulf and led to the closure of the Strait of Hormuz, a crucial shipping route for global oil and gas. Although a temporary ceasefire has brought some market calm, prices remain elevated. In the UK, month-ahead gas futures have risen about 50 percent since the conflict began, while equivalent power contracts have increased by...