Analysts at Cornwall Insight have revised their projection for Britain’s domestic energy price cap, now forecasting an increase of roughly 18% in July. This updated estimate is marginally lower than the 20% rise the consultancy had previously signalled.
Cornwall Insight’s latest projection places the annual cap for a typical household at 1,929 pounds, representing a rise of 288 pounds from the current level of 1,641 pounds set in April. The forecast is framed around movements in global gas markets that have pushed wholesale energy costs higher.
Those international price pressures follow two key developments cited by the analysts: disruptions to shipping in the Middle East and a halt to liquefied natural gas exports from Qatar, one of the world’s largest gas exporters. Cornwall Insight links those events to a surge in international gas prices that feed into domestic wholesale energy costs.
Wholesale energy prices account for the single largest element of the formula used by Britain’s energy regulator to set the domestic price cap. Ofgem calculates the cap on a quarterly basis, incorporating not only wholesale costs but also suppliers’ network charges and environmental and social levies.
Finance minister Rachel Reeves has indicated she would consider interventions to shield households from higher energy bills. At the same time, officials face constraints because of the country’s elevated borrowing costs, which limit the fiscal leeway for large-scale support measures.
Ofgem is scheduled to publish the next official price cap level by May 27. Until that publication, the Cornwall Insight projection represents a market-informed estimate of what households can expect for the July period.
Summary of implications:
- Household energy bills are projected to rise materially in July if the forecast holds, reflecting higher wholesale gas prices.
- Government options to offset the increase are constrained by borrowing costs, suggesting limited scope for broad fiscal relief.
- The official cap setting by Ofgem will confirm the precise level when published on May 27.