Energy prices expected to rise in Q3 2026
Energy prices are expected to rise during Q3 of 2026, following disruption to global oil and gas supplies linked to the US/Israel-Iran conflict, which began in February 2026.
Energy prices rose steadily from the early 2000s before surging during the 2022 energy crisis. Although prices have since fallen, they remain significantly above pre-2022 levels. Domestic energy bills were not affected by the disruption in Q2, but the increase in wholesale energy costs is expected to be reflected in Ofgem’s Q3 2026 energy price cap.
Under the April to June (Q2) 2026 cap, the average annual electricity bill for a direct debit customer with typical consumption was £875, with this figure expected to increase under the next price cap.
Further increases in energy costs are expected to place additional strain on household budgets, particularly for low-income households, amidst the cost-of-living crisis. Rising costs may also increase demand for local authority services, such as housing, and contribute to higher operating costs for some services, such as leisure centres and street lighting.
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