UK Energy Price Cap Forecast

Last updated: 30th April 2025

After a series of increases, UK energy prices are projected to decline this summer, offering some relief to households. 

July 2025 Price Cap Forecast

Cornwall Insight predicts that the energy price cap will decrease by approximately 9% in July 2025, reducing the average annual bill from £1,849 to £1,683. This £166 reduction is attributed to a significant drop in wholesale energy prices, driven by warmer weather and decreased demand. ​

Factors Influencing the Price Drop

Several factors have contributed to the anticipated decrease in energy prices:​

• Weather Conditions: Warmer weather has led to decreased energy consumption, contributing to lower wholesale prices. ​

• Wholesale Market Decline: Benchmark British gas prices have fallen by about 40% since February, influenced by reduced demand and eased EU gas storage regulations. Source: Cornwall Insights

• Global Economic Concerns: Fears of a potential global trade slowdown, partly due to recent U.S. tariff announcements, have impacted energy markets. Source: Reuters

Fixed Tariff Opportunities

In response to the anticipated price cap reduction, British Gas has introduced a market-leading fixed energy deal priced at £1,584 per year, which is £265 below the current price cap. This offer, exclusively available through MoneySuperMarket until May 1, also includes half-price electricity on Sundays for customers with compatible smart meters. ​

Looking Ahead

While the July price cap forecast offers hope for reduced energy bills, the market remains volatile. Analysts remain cautious that geopolitical and economic uncertainties could influence future price movements.

Ofgem is set to announce the official July price cap at the end of May. ​