British households are facing another hit to their finances after Ofgem confirmed a sharp rise in energy bills from July, adding more than £220 a year to the cost faced by the average family.
The increase comes at a difficult time for millions of households already dealing with higher mortgage payments, food prices, council tax bills and other day-to-day expenses. Charities have warned that the latest rise could push more people into debt before winter, when energy use normally increases.
Under the new Ofgem price cap, the average annual dual fuel bill for households paying by direct debit will rise by 13% to £1,862 between July and September. If prices stayed at that level for a full year, it would mean about £18 extra a month for the average household.
The rise is the steepest since the 2022 energy crisis and is higher than many analysts expected. Consultancy Cornwall Insight had forecast an increase of around £209 before the regulator confirmed the final figure.
Ofgem said the increase was driven mainly by higher wholesale gas prices, which have been affected by rising tensions in the Middle East and disruption concerns around the Strait of Hormuz, one of the world’s busiest oil and gas shipping routes.
Oil prices have also risen sharply in recent months, with Brent crude approaching $100 a barrel amid fears over global energy supplies. Although ministers have blamed the latest rise on international instability, the increase has reopened debate over Britain’s energy policy and how exposed households remain to global price shocks.
Energy Secretary Ed Miliband described the new price cap as “deeply unwelcome” and said the long-term answer was to move faster towards clean, homegrown energy.
“The rise in the price cap because of a war we did not choose is deeply unwelcome news for households across the country,” he said.
“We know people were under pressure before this crisis, and that’s why easing that burden is our number one priority.”
Labour has promised not to issue new North Sea oil and gas exploration licences, arguing that renewable energy and nuclear power offer the best route to lower bills and stronger energy security in the long term.
But critics say the UK still relies heavily on gas for heating and electricity generation. They argue that reducing future North Sea development before alternatives are fully ready could leave Britain more dependent on imported fuel.
Conservative leader Kemi Badenoch accused Labour of making bills worse through its energy policy.
“Energy bills are rising again. Labour will blame Iran, but you’re paying more because of Ed Miliband’s net zero taxes and refusal to drill our own oil and gas,” she said.
She said the Conservatives’ “Cheap Power Plan” would cut bills by 20% by removing green taxes, scrapping VAT and expanding drilling in the North Sea.
Senior Conservatives have also argued that Britain should use its own energy resources during the transition to greener power, rather than depend more heavily on overseas markets. Some critics have compared Britain’s approach with Norway, which continues to develop North Sea oil and gas while using energy revenues to support public finances.
The political pressure comes as Prime Minister Sir Keir Starmer faces growing questions over his popularity and Labour’s direction in government. After entering office with a large majority, Starmer is now dealing with weaker personal ratings, voter frustration and signs that some Labour supporters are becoming uncertain or disappointed.
The latest energy rise risks adding to that pressure because household bills remain one of the clearest ways voters judge a government’s performance. Many families may not follow every detail of energy policy, but they know when direct debit payments rise and when money no longer stretches as far.
The UK already has some of the highest electricity costs in Europe. Research from the House of Commons Library found that British electricity prices were above the EU average even before the latest rise. Separate analysis by Full Fact also found that UK domestic electricity prices were among the highest in Europe.
Figures cited by Ofgem show wholesale gas prices have risen by more than 50% since conflict in the Middle East intensified earlier this year. That has fed directly into the new price cap and increased the burden on households.
Debt charities say the situation is already serious. National energy debt has climbed to almost £4.6 billion, while StepChange warned that some families are spending more than a fifth of their income on energy costs alone.
There are also fears that bills could rise again later this year. Cornwall Insight predicts the annual cap could climb to £1,899 in October, just as colder weather begins and households start using more heating.
Ofgem chief executive Tim Jarvis warned that higher prices could continue into winter and urged consumers to consider fixed tariffs where possible.
For many families, however, switching tariffs will not solve the deeper problem. Wages, benefits and savings are already under pressure, while the cost of basic services remains high. Another rise in energy bills means less money for food, rent, transport and other essentials.
The latest price cap increase shows how vulnerable the UK remains to global energy shocks. It also presents a political test for Labour: how to protect households now while building an energy system that is cheaper and more secure in the future.
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