Unending Surge in Energy Prices Expected this Winter
Headline: Energy Prices for British Households to Remain High in 2025, Ofgem Announces
As the heating season begins, British households are bracing for increased energy bills. On the same day, energy regulator Ofgem announced the latest price cap for gas and electricity, revealing that the average dual-fuel bill for households is forecasted to rise to over £1,700 a year, a significant increase from pre-pandemic levels.
According to Ofgem's energy price cap, the average dual-fuel bill for the period from July to September 2025 is estimated to be approximately £1,720 per year. This reflects a 7% decrease from the previous quarter's forecasted average bill of around £1,849.
The price cap for gas and electricity is set quarterly by Ofgem and is designed to protect consumers from excessive price hikes. However, the current forecasts indicate that millions of households will still pay more during the coldest months of the year.
The price breakdown shows a reduction in both gas and electricity unit prices. The gas unit price is capped at 6.33p per kWh, down from 6.99p, while the electricity unit price is capped at 25.73p per kWh, down from 27.03p. Gas standing charges have also been reduced to about 29.82p per day.
Despite the recent drop, energy price forecasts remain volatile due to unpredictable wholesale market conditions. Geopolitical events such as Middle East tensions have affected wholesale prices, keeping the market volatile and causing prices to stay flat.
Consultancy forecasts suggest only minor changes in energy prices for the rest of 2025. Prices might drop by 1% to about £1,698 in autumn 2025, but the situation remains uncertain, and prices might fluctuate again depending on global energy markets and other costs.
The news of the energy hike comes as more households than ever in the UK are struggling to afford their bills. Figures from Citizens Advice show that 5.3 million people currently live in households in debt to their energy supplier. In 2023, 800,000 people went more than 24 hours without gas or electricity due to affordability issues.
The high energy prices are a result of building renewable energy infrastructure in the UK, which comes with implications, including cost. Cornwall Insights suggests that building renewable energy infrastructure in the UK as a way to reduce dependence on volatile global energy markets could help mitigate these costs in the long run.
In summary, British households can expect an average dual-fuel bill around £1,720 for mid-2025 with some minor fluctuations anticipated later in the year. The overall implication is that energy prices are stabilizing but remain elevated compared to pre-pandemic levels, reflecting ongoing wholesale market volatility and cost pressures passed through the regulated price cap system. Ofgem is expected to announce the latest quarterly price cap for January on Friday.
The energy price cap set by Ofgem for the period from July to September 2025 is estimated to be approximately £1,720 per year, reflecting a slight decrease from the previous forecast. The high energy prices are partly attributed to the ongoing construction of renewable energy infrastructure in the UK, which comes with implications, including cost.
Despite the slight decrease in energy prices, consultancy forecasts suggest that the volatile global energy markets and other costs might cause prices to fluctuate again, potentially affecting millions of British households still struggling to afford their bills. The energy industry, particularly finance, plays a crucial role in shaping the energy market and impacting the affordability of energy for households.
