Ofgem confirmed on May 27 that the UK energy price cap will rise by 13% from 1 July 2026, pushing annual bills for a typical dual-fuel household to approximately £1,862 — an increase of £221 per year. The regulator cited the cascading impact of the US-Iran war on global gas prices as the primary driver, with natural gas unit rates rising 27.7% quarter-on-quarter.

The July increase marks the second consecutive quarterly rise in the cap and comes despite expectations earlier this year that energy costs would begin to moderate. The closure of the Strait of Hormuz in April temporarily disrupted liquefied natural gas (LNG) shipments from the Persian Gulf, tightening European supply just as the continent was rebuilding storage ahead of winter.

For UK businesses, the implication is significant. Energy-intensive sectors including food manufacturing, cold chain logistics, and warehousing will face margin compression through Q3. Retailers sourcing from Africa and Asia may also encounter compounding cost pressure as suppliers absorb higher shipping fuel costs on longer alternative routes.

Money Saving Expert founder Martin Lewis has urged households to consider fixing their energy tariff before July 1, noting that some fixed deals currently available are cheaper than the incoming cap rate. Cornwall Insight has further warned that October’s cap could be even higher if the Iran situation remains unresolved, projecting a potential additional 8–12% increase in Q4 2026.