Ofgem has confirmed the energy price cap will fall to £1,641 for a typical household from April 2026, a modest but welcome reduction after several years of elevated prices. That relief may be short-lived. The US and Israeli strikes on Iran that began in late February sent wholesale gas prices sharply higher, and the situation has worsened considerably since. UK gas prices are now up around 70% over the past month. Qatar has declared force majeure on its LNG exports after Iranian strikes on Ras Laffan, removing around 20% of global LNG supply from the market. The OBR has warned the conflict could add 1% to UK inflation this year. Forecasters who were previously expecting July’s cap to hold roughly flat have revised their estimates significantly upward, with Cornwall Insight now forecasting a £332 rise from April, and Stifel warning of a worst-case £2,500 scenario if the conflict is prolonged.
Whether energy bills rise substantially in July depends on how long the current disruption continues. What is not uncertain is that UK households remain exposed to international wholesale price movements, and the most effective response to that exposure is reducing how much gas your home actually uses. If you want to understand what is driving your heating costs and where to start, the house cold diagnostic helps identify whether your home has underlying efficiency problems worth addressing before July.
What has happened to wholesale prices and why it matters for UK bills
The UK imports a significant proportion of its gas as liquefied natural gas, with supply routes running through the Strait of Hormuz and the broader Middle East corridor. The conflict has disrupted approximately 20% of global oil supplies transiting the Strait. Qatar’s Ras Laffan terminal, which supplies around a fifth of global LNG, has been offline since Iranian strikes, and a restart is currently estimated to be weeks away rather than days. The IEA has described this as the largest energy supply disruption in history.
Before the conflict began, Cornwall Insight, the most closely watched independent forecaster of the price cap, expected July’s cap to hold almost flat at around £1,645. Their latest revised forecast, updated on 20 March, puts July at £1,973 — an increase of £332 or 20% over the April level, up from £1,827 the week before. EDF are forecasting a rise to £1,858. Financial firm Stifel has warned that a prolonged conflict could push average household bills to £2,500 per year. The range between forecasters reflects genuine uncertainty about how long wholesale prices will stay elevated, but all credible forecasters are pointing in the same direction.
Forecasts updated — 21 March 2026
Cornwall Insight revised their July cap forecast upward to £1,973 on 20 March, up from £1,827 the previous week, reflecting sustained pressure on wholesale gas prices. EDF are forecasting £1,858. The calculator below has been updated to reflect both figures. Forecasts will continue to shift until Ofgem closes the assessment window in mid-May — Ofgem is expected to publish the confirmed cap level by 27 May.
The cap is set quarterly based on average wholesale prices over an assessment period running to mid-May. A resolution to the conflict before then would limit the July impact. If prices remain elevated through that window, the increase feeds directly into the July cap and households see higher unit rates from 1 July regardless of what happens after.
Your July Bill Impact Calculator
Enter your current annual energy bill to see your projected increase under different July forecast scenarios.
Check your last bill or energy account. The UK average is around £1,641 on the current cap.
Why the current cap protects you until July but not beyond
The April to June 2026 price cap is already set at £1,641 and cannot change until 1 July regardless of what happens in energy markets between now and then. This matters because it means households have a defined window, roughly the next three months, in which their bills are protected even as wholesale prices rise sharply. The disruption has to be sustained through mid-May to fully feed into the July cap figure, so a resolution to the conflict before then would significantly limit the bill impact.
What the cap does not do is insulate households indefinitely. If wholesale prices stay elevated through the assessment period, the July increase feeds directly into the cap methodology and households see higher unit rates from 1 July. At that point, the only way to reduce what you pay is to reduce what you use.
The April green levy removal and what it means for your bill
The April 2026 cap reduction was not primarily driven by falling wholesale prices. It was driven by the government's decision to remove the Energy Company Obligation levy and shift green energy costs to general taxation from April. This produced a reduction in unit rates worth around £150 for a typical household regardless of wholesale market movements. That saving is permanent and does not disappear if the July cap rises, so households will be better off than they would have been under the old levy structure even if the July cap increases significantly.
The levy removal and the Iran-driven wholesale price increase are running in opposite directions. At Cornwall Insight's current forecast of £1,973, the July cap would be well above the January 2026 level of £1,758, erasing the April reduction entirely. At EDF's forecast of £1,858, the increase still materially exceeds the levy saving and households would be paying more in real terms than at any point since early 2025. At Stifel's worst-case scenario of £2,500, the situation would be comparable to the peak of the 2022 energy crisis.
Off-grid households are in a worse position
For the estimated 1.7 million UK homes that heat with heating oil or LPG rather than mains gas, the situation is considerably more severe. These households have no price cap protection at all. Heating oil prices have doubled since the conflict began for some households, with no regulatory buffer and no July review date. The full picture for off-gas households, including a separate cost impact calculator, is covered in why the Iran conflict is hitting oil and LPG households far harder than gas.
What homeowners can actually do before July
The gap between a home that uses typical amounts of gas and one that uses significantly less is determined almost entirely by the building fabric: how well insulated the walls, floor, and loft are, how airtight the windows and doors are, and how efficiently the heating system distributes what heat it does produce. None of these change quickly, but several of the most impactful improvements are either free through grant funding or achievable in an afternoon.
Cavity wall insulation, for households that do not already have it, is the single highest-impact improvement available for most UK homes. The Warm Homes Local Grant currently funds this at no cost for households with income under £36,000 and an EPC rating of D or below. With bills potentially rising significantly in July, applying now rather than waiting is directly in your financial interest. The full eligibility criteria and application process are covered in the Warm Homes Local Grant guide.
Draught-proofing produces a faster result and requires no grant funding. Sealing gaps around windows, letterboxes, and under external doors reduces cold air infiltration, which reduces how hard the boiler has to work to maintain temperature. The most effective options and where to prioritise them are covered in the best draught stoppers for UK homes.
Radiator balancing is free to do yourself and improves how evenly heat is distributed around the house. A system where some radiators are overheating while others are underperforming wastes energy and reduces comfort simultaneously. The step-by-step process is covered in how to balance radiators properly.
Thermostat behaviour also matters more than most homeowners assume. Turning a thermostat down by one degree typically reduces gas consumption by around three percent. The relationship between thermostat settings and actual bills is covered in does turning the thermostat down save money.
Whether to fix your energy tariff now
Some fixed tariffs are currently priced close to or slightly above the April cap level. Whether fixing makes financial sense depends on your view of how long the current market disruption will last. If wholesale prices stay elevated through May, the July cap rises and a fixed tariff taken now looks prescient. If prices fall back quickly, the April cap may prove cheaper. The mid-May assessment window closure is the key deadline — market movements after that point cannot affect the July cap, so any decision about fixing should factor in that date.
WarmGuide does not provide tariff switching advice. The MoneySavingExpert Cheap Energy Club and Ofgem's own comparison tool are the appropriate places to compare current fixed deals against forecast variable rates. If you are with OVO Energy or considering switching, their solar and heating packages are worth checking alongside any tariff comparison, as combining a fixed rate with solar generation reduces your exposure to wholesale price movements more fundamentally than a fixed tariff alone. Regardless of which tariff you are on, reducing your consumption is the most reliable hedge against bill volatility.
The longer-term picture
The Iran conflict has refocused attention on how exposed UK household bills remain to global wholesale gas prices, more than four years after the original 2021 energy crisis made this exposure visible. The OBR has warned the conflict could add 1% to UK inflation by end of 2026. The structural answer to that exposure is reducing how much gas UK homes burn, through insulation, heat pumps, and efficiency improvements, which is exactly what the Warm Homes Local Grant and the broader Warm Homes Plan are designed to accelerate.
In the shorter term, the window before July is the most useful period in which to act. Improvements made now reduce your consumption before the higher cap takes effect, maximise the benefit of any grant funding currently available, and put your home in a better position regardless of where prices end up. For a full overview of everything currently available, the energy grants and support hub covers all active schemes, and the complete guide to keeping a UK home warm for cheap covers the efficiency improvements with the best return for the typical UK home.
Frequently asked questions
Will energy bills go up in July 2026?
Almost certainly yes, based on current forecasts. Cornwall Insight, the most widely followed independent price cap forecaster, revised their July estimate to £1,973 on 20 March 2026 — a £332 or 20% increase on the April cap of £1,641. The increase is driven by the surge in wholesale gas prices following US and Israeli strikes on Iran and the closure of Qatar's Ras Laffan LNG terminal. The final figure will not be confirmed until Ofgem publishes the cap by 27 May.
What is the energy price cap forecast for July 2026?
As of 21 March 2026, EDF are forecasting £1,858 and Cornwall Insight £1,973. Stifel have warned of a worst-case £2,500 if the conflict is prolonged. All forecasts are subject to change and will be revised as wholesale prices shift. The assessment period that determines the July cap runs until mid-May, so any resolution to the Middle East conflict before then would reduce the impact.
Why are energy prices rising again in 2026?
The immediate cause is the conflict in the Middle East. US and Israeli strikes on Iran in late February 2026 triggered disruption to the Strait of Hormuz, affecting around 20% of global oil transit. Iranian strikes on Qatar's Ras Laffan LNG terminal removed a further significant portion of global gas supply. UK wholesale gas prices have risen around 70% since the conflict began. Because the energy price cap is set using average wholesale prices over a three-month window, sustained high prices feed directly into the July cap.
Should I fix my energy tariff before July 2026?
That depends on your risk appetite and how long you think the current disruption will last. Fixed tariffs currently available are priced above the April cap but below some of the higher July forecasts, which means fixing offers protection if prices stay elevated. If the conflict resolves quickly and wholesale prices fall before mid-May, remaining on the variable cap could prove cheaper. MoneySavingExpert's Cheap Energy Club and Ofgem's comparison tool are the best places to compare current deals against forecast variable rates.
Are heating oil and LPG prices affected by the Iran conflict?
Yes, and more severely than mains gas. Heating oil and LPG prices are linked to global oil markets and are not covered by the energy price cap, so there is no regulatory ceiling on what suppliers can charge. Prices have doubled for some off-grid households since the conflict began. The full picture for oil and LPG users is covered in our dedicated guide on why the Iran conflict is hitting oil and LPG households far harder than gas.