Ofgem to announce new price cap as Brits face energy bill hike this autumn

Ofgem is set to announce a new price cap this week as Brits face paying higher energy bills over the winter.

After lowering the energy price cap, which sets the maximum unit price energy suppliers can charge, two times in a row, the energy watchdog looks set to hike the cap as autumn approaches.

Experts have predicted that Ofgem will announce an increase of around 9 per cent from October. The announcement will be made on Friday, August 22.

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Energy consults Cornwall Insight have forecasted that the standard household energy bill will climb to £1,714 annually, from the current £1,568.

The new price cap will come into force from October 1 and last for three months, meaning Brits face higher bills over the colder winter months.

Earlier this week, Craig Lowrey, principal consultant at Cornwall Insight, said the announcement will not be the "news households want to hear when moving into the colder months". He said: "Following two consecutive falls in the cap, I'm sure many hoped we were on a steady path back to pre-crisis prices." But he said the lingering impact of the energy crisis has "left us with a market that’s still highly volatile and quick to react to any bad news on the supply front".

The regulator sets the price limit based on several factors including wholesale energy prices – the amount energy firms pay for gas and electricity before supplying it to households.

Despite the expected rise, average bills remain considerably lower than during the peak of the energy crisis, which was fuelled by Russia’s invasion of Ukraine in February 2022. A price cap of £1,714 a year would still be £120 less than the price cap in October