Energy shock starts to bite in Europe: UK household bills set for 'deeply unwelcome' 2-year high

Supply constraints sparked by the Iran war will drive household energy costs in the U.K. to their highest level in two years over the summer, the country's energy regulator said on Wednesday. Government watchdog Ofgem announced its energy price cap would rise by 13% in July, with electricity prices increasing by around 5% and gas bills soaring 24%. Ofgem's price cap limits how much households in the U.K. can be charged for energy utilities, and is reviewed every three months. "Today's price change reflects continued volatility in global energy markets. This means higher wholesale gas prices, driven by ongoing conflict in the Middle East, is impacting the price we pay for energy," Ofgem CEO Tim Jarvis said in a statement on Wednesday. The current price cap puts a typical household's gas and electricity bill at £1,641 ($2,206.94) a year. From July, that figure will rise by around 13.5% to £1,862 — its highest level since early 2024. Households have reduced their energy usage in Britain, with Britons broadly using 7% less electricity and 17% less gas since Ofgem's last review, when it lowered the price cap by 7%. From July, the organization said, it will factor the drop in usage into its price cap figures. Currently, it said, 40% of energy accounts across Britain are fixed-term contracts, meaning they will be shielded from July's price rises. But Ofgem is expected to hike its price cap again in October. …