UK household energy bills are set to rise by £332 annually as the price cap increases 20% in July, according to Cornwall Insight forecasts. The typical household will pay £1,973 per year from July to September, the highest level since July 2023, driven by surging wholesale gas and electricity prices following the Iran war.

Wholesale gas prices have more than doubled since Israel and the US attacked Iran on February 28, with the Strait of Hormuz closure disrupting about 20% of global liquefied natural gas shipments. This marks the second major energy crisis in three years, following Russia's invasion of Ukraine in February 2022, which previously sent prices soaring.

The price hike presents a political challenge for the Labour government, which has pledged to reduce energy costs but now faces accusations of failing to deliver. Chancellor Rachel Reeves has indicated that "nothing is off the table" regarding intervention, though blanket support like that introduced during the Russia-Ukraine crisis appears unlikely given budget constraints.