According to institutional economic research, British household energy bills are expected to jump by about 25% in January due to the Iran war driving up wholesale electricity and gas prices, further increasing inflationary pressure on the overall economy. The forecast shows that rising energy costs mean that UK inflation may rise to more than 4% next year, double the Bank of England's target. Forecasts also show that the energy price cap — the limit that regulators Ofgem can charge households — is expected to rise by around £427, bringing the average household's annual bill to around £2,150. This would bring the bill closer to the £2,500 cap introduced by the government after the Russia-Ukraine conflict in 2022. Market prices were much higher at the time, but the government subsidized the difference so that typical households only had to pay the upper limit. This support cost the government around £21 billion. The Government is currently considering further measures, including extending the £150 “warm family discount” to those currently ineligible, which may include some disabled people, caregivers and pensioners. Such measures are likely to be announced in the October budget and take effect during the winter.

According to institutional economic research, British household energy bills are expected to jump by about 25% in January due to the Iran war driving up wholesale electricity and gas prices, further increasing inflationary pressure on the overall economy. The forecast shows that rising energy costs mean that UK inflation may rise to more than 4% next year, double the Bank of England's target. Forecasts also show that the energy price cap — the limit that regulators Ofgem can charge households — is expected to rise by around £427, bringing the average household's annual bill to around £2,150. This would bring the bill closer to the £2,500 cap introduced by the government after the Russia-Ukraine conflict in 2022. Market prices were much higher at the time, but the government subsidized the difference so that typical households only had to pay the upper limit. This support cost the government around £21 billion. The Government is currently considering further measures, including extending the £150 “warm family discount” to those currently ineligible, which may include some disabled people, caregivers and pensioners. Such measures are likely to be announced in the October budget and take effect during the winter.