Ofgem raises UK energy price cap 4% from October 1

Millions of households across Britain will face higher energy bills from October 1, 2026, after the regulator Ofgem confirmed a 4 per cent increase in its energy price cap for the final quarter of the year. The new cap, announced on August 26, 2026, will set a typical annual bill for a dual-fuel household paying by direct debit at £1,723, an increase of £60 per year, or about £5 per month, from the current £1,663. The cap applies to roughly 22 million households on default tariffs and will remain in place until December 31, 2026. Ofgem attributed the rise primarily to higher wholesale gas prices, which have increased by about 11 per cent over the past three months. The regulator cited the ongoing conflict in the Middle East as the dominant driver of recent price swings in global energy markets. The increase would have been steeper without government intervention, as the removal of VAT from domestic electricity bills from October 1, 2026, through March 2027, has partially offset the rise. Without this measure, Ofgem said the typical bill would have been around £45 to £61 higher. The rise is not uniform across all households.