Britain's Energy Cap to Hit £1,729 in October as Middle East War Erases £45 VAT Cut
Updated
Updated · The Guardian · Aug 19
Britain's Energy Cap to Hit £1,729 in October as Middle East War Erases £45 VAT Cut
3 articles · Updated · The Guardian · Aug 19
Summary
A 4% rise in Great Britain’s household energy price cap would lift a typical annual dual-fuel bill to £1,729 from October, the highest level since July 2023, according to Cornwall Insight.
Cornwall linked the increase to surging gas prices driven by the Middle East war and heavier use of costly gas-fired power during European heatwaves, leaving Prime Minister Andy Burnham’s planned £45 average VAT cut unable to offset the jump.
Ofgem is due to set the cap next Wednesday; Cornwall estimates direct-debit electricity rates rising to 26.57p per kWh from 26.11p and gas to 7.90p from 7.33p.
Current market prices point to another increase in January, analysts said, with the outlook still highly sensitive to developments in the Middle East.
Energy analysts said the spike underscores Britain’s continued dependence on imported gas, while the government pointed to VAT cuts, a £150 warm home discount for about 6 million households and efficiency plans.