Energy Price Cap Predictions

The latest energy price cap forecast

Energy bills change every three months for households on a standard variable tariff. Ofgem, the energy regulator for Great Britain, sets a limit on the maximum amount suppliers can charge for each unit of gas and electricity. This is known as the energy price cap. Because wholesale energy prices constantly move, independent analysts track the markets to predict what the next price cap will be before Ofgem officially announces it.^[1]

The latest forecast from Cornwall Insight, updated on 19 August 2026, suggests that energy costs will go up this winter. The forecaster expects the price cap for the period from 1 October to 31 December 2026 to rise to £1,729 a year for a typical dual-fuel household paying by Direct Debit. This is an increase from the current confirmed summer cap of £1,663.

It is important to remember that the headline figure is not a strict limit on your total bill. It is simply an illustration of what a household with typical energy use would pay over a full year. If you use more energy than average, your bills will be higher than the headline figure. If you use less, your bills will be lower. The cap only limits the underlying unit rates and daily standing charges.

Forecast versus confirmed prices

When looking at energy prices, you need to separate official Ofgem announcements from analyst predictions. The current prices for summer 2026 are locked in and confirmed by Ofgem. The prices for winter 2026 are currently just a forecast based on wholesale market data.

The table above shows the current confirmed cap alongside the latest forecast. You will notice two different headline figures for each period. This is because Ofgem recently changed how it measures a "typical" household, which we explain in detail in the next section. When you read news reports about energy prices, check which usage figure they are quoting to ensure you get an accurate picture of the market.^[1]

Forecasts are estimates provided by independent analysts and are always subject to change. They only become certain when officially confirmed by Ofgem. The regulator is scheduled to announce the final, confirmed October to December 2026 price cap by 26 August 2026.

Why the old and new headline figures differ

On 1 July 2026, Ofgem updated its Typical Domestic Consumption Values. These benchmark figures represent the annual gas and electricity use of a typical household. Ofgem lowered them to reflect reduced average consumption, so current and forecast headline caps must be compared on the same basis.

Under the new basis, Ofgem assumes a typical home uses 2,500 kWh of electricity and 9,500 kWh of gas per year. Using these numbers, the current confirmed price cap is £1,663. Under the old basis, Ofgem assumed 2,700 kWh of electricity and 11,500 kWh of gas. If you calculate the exact same unit rates using those older, higher usage numbers, the cap comes out at £1,862.

It is vital to understand that this change in how Ofgem measures typical usage does not change how much energy your household uses or create a separate charge on your bill. However, Ofgem says the revised values affect the price-cap unit rate because suppliers recover certain costs over fewer units of demand. You still pay for exactly what you use. If your household uses 3,000 kWh of electricity, your bill is calculated on that exact amount, regardless of what Ofgem calls "typical".

What the forecast means for gas and electricity rates

If Cornwall Insight’s forecast proves accurate, households will see an overall increase in energy costs this winter. While the forecaster has not published exact projected unit rates, a rise in the headline figure indicates that the underlying cost per unit of energy, the daily standing charges, or both will go up on average.

For context, the current average Direct Debit rates under the summer price cap are 26.11p per kWh for electricity with a 57.19p daily standing charge, and 7.33p per kWh for gas with a 29.04p daily standing charge. These rates include 5% VAT and vary slightly depending on where you live in the country.^[1]

However, the exact impact of the winter price rise on your personal bill will depend heavily on your fuel split. This is because the Government recently announced that domestic electricity VAT will move from 5% to 0% from 1 October 2026 in Great Britain. Northern Ireland requires a separate EU agreement, but the Government has promised comparable support there.^[2]

Cornwall Insight says its forecast already includes this electricity VAT cut. Because the tax cut only applies to electricity, it will offset part of any increase in the electricity portion of a bill. The precise effect depends on electricity use and on the unit rates and standing charges Ofgem confirms.

What could move the forecast before it is confirmed

Energy forecasts change frequently. Analysts update their predictions every time the wholesale energy market shifts. Several variables can alter the final figures before Ofgem confirms them.

Ofgem does not use the wholesale price on the day it announces the cap. It assesses wholesale costs over defined observation windows, so market movements during the relevant window can change the final cap. This is one reason an analyst forecast may differ from Ofgem’s confirmed figure.

Ofgem has already warned that continued wholesale gas disruption could put pressure on later cap periods into 2027. Global events, such as conflicts in the Middle East or changes in international gas supply, affect how much it costs to generate electricity and heat homes in the UK.

Should you fix your energy tariff now?

Choosing whether to fix your energy tariff is a complex decision. While the current forecast points to a price rise this winter, you should never decide to lock into a contract solely based on a headline forecast. The headline figure is an average, and it does not tell you exactly what a supplier will charge you.

To make an informed choice, get a personalised household quote and use an energy bill calculator to compare it with your present costs. Fixed tariffs set unit rates and standing charges for a specific period, commonly 12 months. Your fixed rates will not move with a quarterly cap change, but your total bill still depends on how much energy you use.

If you value price certainty, a fixed tariff may offer peace of mind. Weigh that against the risk of being locked in if wholesale costs fall. Compare current fixed tariffs and variable tariffs using your actual usage and region before deciding.

Update timetable and what happens next

The energy price cap changes four times a year: in January, April, July, and October. Ofgem usually announces the new levels about five to six weeks before they take effect. This gives suppliers enough time to notify their customers about the upcoming changes to their bills.

Ofgem says it will publish the official October to December 2026 figures by 26 August 2026. This draft requires human editorial review immediately after that announcement. Once Ofgem confirms the cap, the Cornwall Insight estimate should be retained only as dated forecast context and the confirmed rates should lead the page.

Until then, treat the £1,729 figure as the latest dated estimate, not a guaranteed outcome. Use the current price cap page for confirmed regional rates and historical cap data.