Your Energy Bills Are Going Up Again This October — Here's Why
British households face another rise in energy bills this October. A leading energy consultancy called Cornwall Insight forecasts that the typical household will pay £1,729 per year for gas and electricity combined from October 2026 — about £66 more than the previous level of £1,663. The figure, published on 19 August 2026, would make it the highest level since July 2023 (The Guardian). Reuters independently reported the same £1,729 ($2,344) figure (Reuters).
In Britain, the energy regulator Ofgem sets a "price cap" — a ceiling on how much energy companies can charge a typical household per year. Ofgem reviews this cap every three months. Cornwall Insight, a company that analyses energy markets, says this is its final forecast before Ofgem sets the official cap, so analysts and policymakers are paying close attention.
The forecast also breaks down the cost per unit of energy. For electricity paid by direct debit, Cornwall Insight expects the rate to rise from 26.11p to 26.57p per kilowatt hour — the standard way energy use is measured. For gas, the rate would go from 7.33p to 7.90p per kilowatt hour. These per-unit charges add up to the £1,729 annual figure for a typical household.
Two main factors are pushing bills up. Wholesale gas prices — what energy companies pay to buy gas before selling it to households — have hit a near four-year high, according to Jess Ralston of the Energy and Climate Intelligence Unit. The rise is linked to the war in the Middle East, which has shaken energy markets. European heatwaves have made things worse, because they increase demand for gas-fired power as people turn up air conditioning and strain the electricity grid.
Cornwall Insight also expects bills to rise again in January 2027, based on current market prices for future energy delivery. But that forecast could change depending on what happens in the Middle East. If the conflict eases, prices could come down. If it worsens, prices could rise further.
The forecasts have shifted a lot over the past several months. In March 2026, Reuters reported Cornwall Insight's projection that the cap would rise about 11% in July 2026 to £1,827 for typical use (Reuters). By late March, the consultancy had raised that July forecast to an 18% rise, reaching £1,929 (Reuters). The actual cap has since moved differently from those earlier forecasts, showing how hard it is to predict something tied so closely to volatile energy markets.
The way Ofgem calculates the cap has also changed. Under its old method, Cornwall estimated the October 2026 cap would have been much higher: £1,940.69, compared with £1,862 for the July-to-September period. The gap between that figure and the current £1,729 forecast comes down to changes in how Ofgem structures the calculation, including adjustments to allowances that affect the final number on your bill.
UK Prime Minister Andy Burnham has announced a plan to cut VAT — a tax added to the price of goods and services — on household electricity bills starting October 2026. The government says this would save households an average of £45 per year. The policy was announced in July 2026 as the government's first cost-of-living move. That £45 saving would cover roughly two-thirds of the £66 increase in the forecast, though the tax cut applies only to electricity, not gas.
The broader context here is that British households are heading into a third winter in a row of high energy costs. The cap remains well above what people paid before 2022, even though it has not reached the extreme peaks of the recent crisis. The combination of ongoing conflict in gas-producing regions and more frequent extreme heat means that energy bills are likely to stay sensitive to events far beyond Britain's borders. For policymakers and businesses that use a lot of energy, the January 2027 forecast adds more uncertainty: further disruption in the Middle East or another hot summer could push the cap even higher, making it harder for the government to hold back on extra support for households.
