Price cap forecast to rise sharply as Middle East conflict continues

The next price cap for household energy bills is forecast to rise sharply as the Middle East conflict continues.

Cornwall Insight currently predicts that under Ofgem's price cap for July to September, a dual-fuel household using a typical amount of gas and electricity would pay £1,973 a year, up from the current £1,641.

The final cap figure will depend on what happens to wholesale prices before the end of May.

Meanwhile the head of the International Energy Agency warned that the global economy faces a “major, major threat” because of the Iran war.

Fatih Birol said the crisis in the Middle East poses a greater combined impact than the two oil shocks of the 1970s and the effect on gas markets of the Russia–Ukraine war.