Millions of UK households could see energy bills rise by £208 a year from July as the Government warns the price cap is set to climb again. The price cap affects some of the biggest suppliers in the country, including British Gas, EDF, EON, OVO, and Octopus.
Price Cap Increase Details
Chancellor Rachel Reeves warned that the cap is expected to be “at a similar level to the cap in April last year.” This would mean average annual household bills rising from the current £1,641 price cap set in April 2026 back towards the £1,849 level seen in April 2025, an increase of around £208.
Government Response
Speaking in the Commons, Labour Party Chancellor Ms Reeves said: “Next week, Ofgem will confirm the level of the energy price cap that will apply from July. I know that any increase will be felt by families. Because of the decision made at the Budget last year to cut £150 off energy bills, we have lessened the impact of rising prices, and current external forecasts suggest that the cap from July will be at a similar level to the cap in April last year.”
She added: “We stand ready to act if market conditions worsen significantly later this year, and I have been leading cross-government contingency work on design of potential future targeted and temporary support. For businesses, any support will also need to be carefully targeted at firms most exposed to the crisis.”
Support for Businesses
Ms Reeves continued: “But while many firms have been insulated from recent price rises through fixed price contracts, there are sectors that face particular structural issues related to energy costs. That is why we have already increased support for our most energy intensive companies through the British Industry Competitiveness Scheme and we’ve brought that forward. And it is why we must also build resilience in our critical infrastructure and industrial strategy sectors where supply chains are critical for growth and security.”
The price cap, which affects suppliers like British Gas, EDF, EON, OVO, and Octopus, is set to be confirmed by Ofgem next week. Households are advised to review their energy usage and consider fixed-rate tariffs to mitigate potential increases.
