Ofgem will lift Great Britain’s household energy price cap 4% in October.
Why it matters: The increase pushes typical bills to £1,723 a year and will hit household budgets heading into winter. It could also add pressure on employers, consumer spending and inflation expectations, while renewing scrutiny of the UK government’s energy-cost response.
- The cap rises to £1,723 a year for a typical household paying by direct debit, up from £1,663.
- Ofgem says that is about £60 a year, or £5 a month, more for the quarter starting October 1.
- Around 22 million households are covered by the default-tariff cap, while around 11 million on fixed tariffs are not affected.
- Ofgem says the move is mainly due to higher wholesale gas prices linked to the conflict in the Middle East and volatile global gas markets.
Ofgem said on August 26 that Great Britain’s household energy price cap will rise 4% for the quarter from October 1 to December 31. The regulator said the new cap will be £1,723 a year for a typical household paying by direct debit, up from £1,663. Ofgem announcement
That works out to about £60 a year, or £5 a month, more. Ofgem said around 22 million households are protected by the cap on default tariffs, while about 11 million households on fixed tariffs will not be affected by this rise.
The regulator attributed the increase mainly to higher wholesale gas prices, citing the ongoing conflict in the Middle East and volatile global gas markets. Ofgem also said the VAT removal on domestic electricity bills is reflected in the October cap, meaning electricity bills will remain broadly stable and that most of the rise comes from higher gas costs.
Ofgem said the cap remains 52% below the peak of the 2022 energy crisis, when the government stepped in with a £2,500 cap on typical bills. The cap applies in Great Britain - England, Scotland and Wales - but not Northern Ireland. Coverage details
BBC Business reported the decision as a rise to a three-year high, and other UK outlets said the October cap will be the highest since July 2023. Cornwall Insight had previously forecast about a 4% increase.
By the numbers
- 4% - Ofgem’s increase for the October to December cap period
- £1,723 - typical annual bill under the new cap, up from £1,663
- 22 million - households protected by the default-tariff price cap
Yes, but: The cap is not a total-bill limit, so actual household costs still depend on usage, tariff type and payment method.
What's next: The new cap takes effect October 1 and runs through December 31.