Industry experts are warning of a severe energy price spike this summer as the conflict in Iran sends global energy markets into a tailspin. As of today, 19 March 2026, Brent Crude has hit $116 a barrel, while UK wholesale gas prices have jumped 23% in a single morning to reach their highest levels since 2022.
The conflict has severely impacted supplies through the Strait of Hormuz, creating what analysts call the “biggest supply shock in history.” This uncertainty, combined with today’s Bank of England decision to hold interest rates at 3.75%, suggests that UK households should prepare for a significant hit to their cost of living.
What is the energy price cap?
Originally introduced in 2019, the energy price cap is a maximum value domestic customers can be charged for their gas and electricity. The cap sets an annual charge for a typical household of 3-4 people, with energy suppliers setting unit rates and standing charges based on this total.
Your personal energy bill is still based on how much gas and electricity you use, but the price cap controls how much you pay for each kWh of energy, as well as the daily standing charge you pay for access to the supply.
The price cap is adjusted every three months based on a number of factors, with wholesale energy prices being the most significant. The next price cap change, on April 1st, has already been determined. The next adjustment will be on July 1st, with experts debating how much of a change to expect.
How high will the energy price spike be?
On April 1st, the energy price cap is still set to fall by roughly 7% to £1,641 a year. This is largely due to government policy changes and price trends set before the war escalated in late February. Previously, experts had predicted that the July price cap would rise slightly, by around 4%, to around £1,710 a year.
However, the outlook for July has darkened significantly. Following the attacks on Gulf energy facilities this week, industry analysts are predicting a much sharper energy price spike. Cornwall Insight, which has a history of accurate price cap predictions, has amended its projection to £1,800 a year after wholesale gas prices rose 150% in one day at the start of the month:
- Cornwall Insight: Now predicts the July cap will surge to at least £1,801, a 10% jump.
- Stifel: Warns that if the conflict prolongs, the cap could hit £2,500, returning bills to the peak of the 2022 energy crisis.
- Wholesale Markets: UK gas futures for next month have already more than doubled since the start of the war, hitting 172p per therm today.
How can I beat the energy price spike?
If you’re concerned about the energy price spike, there are several things you can do to keep your energy bills under control. The simplest is to switch to a fixed-rate tariff. This means you will know your unit rates for gas and electricity for the next 12 months (or however long the tariff lasts). Once you’re on a fixed tariff, prices won’t change, even if wholesale gas and oil prices rise.
Once you’ve switched to a new tariff, some of the other ways to save on your energy bills include:
- Submit regular meter readings, so you’re only charged for the energy you’ve used
- Save energy where you can – we’ve got more than 100 tips on how to use less energy at home
- Be sure to close your account properly if you switch provider or move – there’s more than £2 million sitting unclaimed in closed energy accounts
