--- title: "Energy bills face further rise as Ofgem cap hits three-year high" publisher: "Stockmark.IT" author: "Stockmark.IT Website" published: "2026-08-27T06:03:50+00:00" modified: "2026-08-27T06:03:50+00:00" date: 2026-08-27 canonical: "https://stockmark.it/households-warned-of-worse-to-come-as-energy-bills-rise/" category: "Business" categories: ["Business", "Energy", "Financial"] image: "https://i0.wp.com/stockmark.it/wp-content/uploads/2026/08/energy-bills-face-further-rise-as-ofgem-cap-hits-three-year.png?fit=1536%2C1024&quality=80&ssl=1" format: "news" language: "en-GB" --- # Energy bills face further rise as Ofgem cap hits three-year high **Published:** August 27, 2026 **Author:** Stockmark.IT Website **Categories:** Business, Energy, Financial **Featured image:** ![Energy bills face further rise as Ofgem cap hits three-year high](https://i0.wp.com/stockmark.it/wp-content/uploads/2026/08/energy-bills-face-further-rise-as-ofgem-cap-hits-three-year.png?fit=1536%2C1024&quality=80&ssl=1) --- Households in the United Kingdom have been warned that energy costs are set to increase further after the regulator Ofgem announced a rise in its price cap to a three-year high. Typical annual household gas and electricity prices will increase by £60 from October, marking a 4 per cent rise. This follows a 13 per cent jump in July, which was attributed to the conflict in Iran pushing up global oil and gas prices. Analysts at the energy consultancy Cornwall Insight have indicated that there is no relief in sight for consumers in January if the conflict in the Middle East continues. They forecast a further 9 per cent rise in the new year, which would put an average January bill at £1,872 a year, £149 higher than the prices coming into effect from October. The Prime Minister, Andy Burnham, acknowledged on Wednesday that rising energy bills were difficult for people. Speaking to reporters from a supermarket in London, he stated that the government had decided to remove VAT from electricity bills to provide some assistance. He noted that while the price cap would have an impact, it was the action the government could take immediately. He added that the administration would continue to look for ways to lower energy prices in the long term. However, the latest increase to the price cap effectively wipes out the £45 reduction resulting from the VAT cut. Miatta Fahnbulleh, the Energy Secretary, hinted that there could be more action from ministers to protect families from unaffordable bills, with the Budget due to be held on October 28. Craig Lowrey of Cornwall Insight warned of a risk of more hardship by January, noting that where bills land will depend on whether the situation in the Middle East calms down in the next couple of months. He added that low European gas stocks heading into the winter meant bills were unlikely to fall. Meanwhile, Ms Fahnbulleh appeared to suggest that investment in net zero projects was contributing to higher household bills. When asked on LBC if the rise could be blamed on political choices to pay for renewable subsidies as well as the Middle East conflict, she replied that it was both. However, she later insisted it was simply not true that net zero was adding to bills when questioned by Sky News. Greg Jackson, the boss of Octopus Energy, said that Britain remains far too exposed to volatile global gas prices. He stated that the wars in Ukraine and Iran have created an unprecedented double crisis, with gas prices more than doubling since the start of the year. He called for urgent market reform and better use of wind energy to allow people to benefit from cheaper prices when green energy is abundant. Ned Hammond, deputy director for customers at Energy UK, warned that the increase is more worrying as households increase their energy use during the colder months. He said the rise intensifies the challenges faced by customers struggling to afford their bills and urged the government to assess how to bring bills down over the longer term. Ofgem said it was noticing rising debt levels among households as energy bills continue to rise. The regulator stated it was acutely aware that households are struggling under the weight of higher prices and encouraged people to fix their bills. It noted that while the number of households falling behind on their bills was reasonably static, many were falling further behind, resulting in a rising stock of debt in the sector. Officials added that the rise in energy bills was not a result of changes in net zero policies and was almost exclusively due to a change in wholesale costs. Consumer groups and campaigners said the removal of VAT from electricity bills has done little to offset the rising price of energy for households. Dame Clare Moriarty, chief executive of Citizens Advice, said the price cap rise pushes energy prices to a three-year high and is another sign of the relentless erosion of living standards. She called for further bold action to protect those most at risk of being trapped in cold, dark homes this winter. Simon Francis, co-ordinator of the End Fuel Poverty Coalition, noted that price rises fall hardest on the households who can least afford them, with millions forced to pay more for the same energy or ration the energy they use even further. Professor Nick Butler, a former BP executive, suggested that the Energy Secretary could lower bills by changing the way Ofgem sets its price cap. He argued that the regulator has stuck rigidly to a reliance on gas as the guiding price and that the government could change the instructions to Ofgem to reassess how the cap is set. He noted that many people have little confidence in the regulator and that constituents believe they are paying too much for their energy without benefiting from any move to low carbon. Charity bosses have urged the Prime Minister to extend subsidies for low income households as energy prices rise. Joanna Elson, chief executive of Independent Age, said the Ofgem announcement will heap more pressure on the already stretched budgets of older people living in poverty. She suggested extending the Warm Home Discount from £150 to £400 to help those who cannot make ends meet. Adam Scorer, chief executive of National Energy Action, added that rising energy prices heading into winter will plunge people into despair and place millions at risk. He called for the government to strengthen targeted winter bill support and move quickly to establish a Debt Relief Scheme. Andy Mayer, energy analyst at the Institute of Economic Affairs, warned that Britain’s net zero strategy is embedding high costs into energy bills. He stated that the rise in the energy price cap is another blow for households already struggling with high energy costs and that renewables require expensive back-up, balancing and connections. He argued that tinkering with who pays may provide short-term relief, but it will not bring costs down, requiring a pause and reset of the current approach. The price of wholesale gas has fallen at the fastest pace in three weeks after Iran and Oman resumed talks on resuming shipping through the Strait of Hormuz. Dutch TTF, the benchmark for Europe, declined as much as 6.8 per cent after Iranian foreign minister Abbas Araghchi discussed a temporary joint maritime corridor with his Omani counterpart Badr Albusaidi. The two sides also said they would hold further talks on a permanent route for shipping through the strait. --- **Original URL:** https://stockmark.it/households-warned-of-worse-to-come-as-energy-bills-rise/ *Created by [WP Markdown Endpoint](https://wpmarkdownendpoint.com/)*