Energy price cap rises 4%, adding £60 to annual bills

Ofgem has confirmed that the energy price cap for Great Britain will rise by 4% from October 1, pushing up annual bills for millions of households as the winter heating season begins. The new cap, which will be in place until December 31, means a typical household on a standard tariff paying by direct debit will see annual costs increase from £1,663 to £1,723, an additional £60 per year or £5 per month.

The regulator stated the increase reflects higher wholesale gas prices driven by the ongoing conflict in the Middle East, with volatile global markets remaining the dominant factor. While prices remain 52% below the peak of the 2022 energy crisis, the rise marks a three-year high for average bills. The cap protects around 22 million households on default tariffs, though approximately 11 million households on fixed tariffs will not be affected by this immediate increase.

The UK Government's decision to remove VAT from all domestic electricity bills is reflected in the October cap. Ofgem said this intervention limited the rise, with most of the increase driven by an 8% jump in gas costs. Households that do not use gas will see a much smaller increase of less than 1%. Energy...