Energy bills expected to rise from October - despite previous forecasts

Energy bills are now expected to rise in autumn, a reversal from the previously anticipated price drop, a prominent forecaster has said.

Households will be charged £17 more for a typical annual bill from October as the energy price cap is due to rise, according to consultants Cornwall Insight.

In roughly six weeks, an average dual fuel bill will be £1,737 a year, Cornwall Insights predicted, 1% above the current price cap of £1,720 a year.

The price cap limits the cost per unit of energy and is revised every three months by the energy regulator Ofgem.

Bills had previously been forecast by the consultants to fall in October. Such an increase had not been anticipated until now.

Why are bills getting more expensive?

Charges are predicted to be introduced from October to fund government policies. Measures such as the expansion of the warm home discount, announced in June, will add roughly £15 to an average monthly bill.

The discount will provide £150 in support to 2.7 million extra people this year, bringing the total number of beneficiaries to 6 million.

Volatile electricity and gas prices are also to blame for the forecast increase.

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Turbulent geopolitical events during Ofgem's observation period for determining the cap, including the unpredictability of US trade policy, have also had an impact, while Israel's airstrikes on Iran intensified concerns about disruption to gas shipments.

Prices have eased, however, with British wholesale gas costs dropping to the lowest level in more than a year.

Also helping to keep the possible bill rise relatively small is news from the European Parliament that rules on gas storage stocks for the winter would be eased.

Bulk buying and storage of gas in warmer months helps eliminate pressure on supplies when demand is at its highest during cold snaps.

When will bills go down?

A small drop in bills is forecast for January, but it is subject to geopolitical movements, weather patterns and changes to policy costs.

An extra charge, for example, could be added to support new nuclear generating capacity.

The official Ofgem announcement will be made on 27 August.

(c) Sky News 2025: Energy bills expected to rise from October - despite previous forecasts