Typical energy bill forecast to rise by £332 a year in July

Typical annual household energy bills could go up by £332 in July, energy consultancy Cornwall Insight calculates, although the figure is likely to change.

The forecast reflects the surge in oil and gas prices as the US-Israel war on Iran continues, and could rise further or fall back depending on where energy prices go next.

The energy regulator Ofgem will set the July cap on energy bills for households on 27 May, based on wholesale prices in March, April and May.

The cap limits what a typical dual fuel household would pay. Actual bills depend on the amount of energy used.

Cornwall Insight's latest forecast predicts that Ofgem's price cap for July to September will hit £1,973 a year, up from the current £1,641 for a typical dual fuel household.

The independent energy consultancy is currently updating its forecast weekly due to the volatile situation in the Middle East.

Wholesale energy prices jumped in the first three weeks of March, but the final cap will also depend on what happens to prices in the remaining 10 weeks before the end of May.

The energy price cap covers about19 million households in England, Wales and Scotland and is set by Ofgem every three months.

It fixes the maximum amount customers can be charged for each unit of gas and electricity on a standard - or default - variable tariff for a typical dual-fuel household which pays by direct debit. But it is presented as a cap on the typical overall annual energy charges.

Political pressure is building on the government to provide support for households if bills rise sharply in July.

However there is a debate over whether that help should be universal, distributed to all households, or targeted at vulnerable and low-income houses. A targeted approach would allow more money to be given to households in need and would cost less, at a time when government spending is stretched.

In 2022 following Russia's invasion of Ukraine the Government provided a package of support that applied to every bill payer and was not dependent on income or vulnerability. The package cost more than £35bn.

The energy industry represented by Energy UK has called for a more targeted approach to cover next winter if prices remain high.