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2026-09-15 15:38:09
[Iran War Pushes Up Energy Prices: UK Household Energy Bills Expected to Rise by About 25% in January, Inflation May Exceed 4% Next Year] (1) An institutional economics study says that UK household energy bills are expected to jump by about 25% in January as the war in Iran pushes up wholesale electricity and gas prices, further exacerbating inflationary pressures on the overall economy. (2) Forecasts show that rising energy costs mean UK inflation could rise to over 4% next year, double the Bank of England’s target. (3) Forecasts also show that the energy price cap – the regulator Ofgem’s limit on what suppliers can charge households – is expected to rise by about £427, bringing the average household’s annual bill to about £2,150. (4) This would bring the bill close to the £2,500 cap introduced by the government after the Russia-Ukraine conflict in 2022. At that time, market prices were much higher, but the government subsidized the difference, so that the average household only had to pay the cap amount; this support cost the government about £21 billion. (5) The government is currently considering further measures, including extending the £150 “Warm Family Discount” to those who are currently ineligible, potentially including some disabled people, caregivers and pensioners. (6) Such measures may be announced in the October budget and take effect in winter.
