Typical annual household energy bills could go up by £332 in July, energy consultancy Cornwall Insight calculates, although the figure is likely to change.

The forecast reflects the surge in oil and gas prices as the US-Israel war on Iran continues, and could rise further or fall back depending on where energy prices go next.

The energy regulator Ofgem will set the July cap on energy bills for households on 27 May, based on wholesale prices in March, April and May.

The cap sets a maximum price for each unit of gas and electricity and is changed every three months. Actual bills depend on the amount of energy used.

Cornwall Insight's latest forecast 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 independent energy consultancy is currently updating its forecast weekly due to the volatile situation in the Middle East.

Wholesale energy prices jumped in the first three weeks of March, but the final cap will also depend on what happens to prices in the remaining 10 weeks before the end of May.

The energy price cap covers about19 million households in England, Wales and Scotland and is set by Ofgem every three months.

It fixes the maximum amount customers can be charged for each unit of gas and electricity on a standard - or default - variable tariff for a typical dual-fuel household which pays by direct debit. But it is presented as a cap on the typical overall annual energy charges.

A spokesperson for the Department for Energy Security and Net Zero said the forecast remained "highly speculative".

"Using wholesale price fluctuations to predict what will happen in the next few months is not reliable," he said.

The government was already taking action to bring down bills, he added, including expanding the Warm Home Discount to around six million households.

"Tackling the affordability crisis is the Government's number one priority," he said.

Political pressure is building on the government to provide support for households if bills rise sharply in July.

However there is a debate over whether that help should be universal, distributed to all households, or targeted at vulnerable and low-income houses. A targeted approach would allow more money to be given to households in need and would cost less, at a time when government spending is stretched.

Chancellor Rachel Reeves told the Times last week that help would be targeted to protect poorer households. The Treasury was drawing up "different options", she told the paper.

In 2022 following Russia's invasion of Ukraine the Government provided a package of support that applied to every bill payer and was not dependent on income or vulnerability. The package cost more than £35bn.

In November's Budget the government took action to reduce energy bills by £150 by removing some additional charges. Without that reduction, Cornwall's latest forecast would have pushed a typical household annual bill above £2,000.

With pressure likely to continue on oil and gas prices, a global body, the International Energy Agency, is suggesting a list of measures to reduce the amount of energy being consumed across the world.

It said governments could reduce speed limits for drivers by 10 km/h and businesses could allow more working from home.

Many Asian countries have already introduced measures to limit consumption. Air conditioning cannot cool below 25 degrees in Bangladesh and 26 degrees in Thailand.

Many countries are introducing shorter hours for schools and university and limiting air travel for public officials. Pakistan and the Philippines have introduced a four-day week for public servants.

The IEA's other suggestions for governments, businesses and individuals include:

It also said there should be a focused effort to preserve liquid petroleum gas for cooking and other essential uses, by switching bio-fuel converted vehicles onto gas and introducing other measures to reduce its use.

Addressing demand was "a critical and immediate tool"  the IEA said that would improve affordability and support energy security.

"In the absence of a swift resolution [of the Middle East conflict], the impacts on energy markets and economies are set to become more and more severe," said IEA executive director Fatih Birol, but the menu of demand side measures could help "shelter consumers", he said.

The scheme, which will cost £81m, follows on from an announcement made at the UK budget in November 2025.

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