Millions of households are bracing for the steepest rise in energy bills in four years next January, according to a new forecast from consultancy Cornwall Insight shared with the BBC.
The price cap set by regulator Ofgem is expected to jump 16 per cent to £1,999 a year for a typical dual-fuel home paying by direct debit. That would be an increase of £276 on the current cap of £1,723, and the biggest single quarterly rise since early 2023.
The forecast lands just as the October cap takes effect. Around 20 million households in England, Scotland and Wales on variable tariffs saw prices go up 4 per cent on Thursday, worth roughly £60 a year. If the January prediction holds, the pain at the coldest time of the year will be several times that.
Cornwall Insight said a January increase now looked all but certain. The wholesale prices that feed into the cap are at their highest level in four years, and much of September’s rise is already locked in because the pricing window for the January cap is nearly halfway through. If wholesale costs keep climbing, so will the forecast.
The consultancy pointed to the conflict involving Iran as a reason international gas prices have stayed elevated, and said it cannot yet see an end to the volatility. Craig Lowrey, principal consultant at Cornwall Insight, put it plainly: January is already a difficult month for many families, with cold weather and bank balances still recovering from Christmas.
There is one thread of uncertainty worth holding on to. Ofgem will not announce the actual January price change until late November, and an easing of tensions abroad could soften the blow. Analysts stress the £1,999 figure is a prediction, not a decision.
For households already struggling, the two months between now and that announcement may be the last window to consider a fixed deal, and the government will face growing pressure to say what it will do for the roughly one in three homes that receive help with energy costs already.
Figures and context in this article are drawn from the BBC and from Cornwall Insight’s published forecasts.