British households face a sharp increase in energy costs this summer, with bills forecast to rise by more than \u00a3200 a year as the Middle East conflict hits the domestic market.<\/p>\n
The energy analyst Cornwall Insight has released its final forecast for the July to September price cap, predicting that the annual bill for a typical dual-fuel household will climb to \u00a31,850. This represents a 13 per cent increase from the current cap of \u00a31,641.<\/p>\n
The increase is attributed to a volatile wholesale market since the Iran war<\/a> started on February 28. The report said prices climbed sharply in February and March after United States<\/a> and Israeli<\/a> strikes on Iran triggered retaliatory attacks. It led to the closure of the Strait of Hormuz<\/a>, through which around a fifth of the world\u2019s oil and gas previously passed, pushing up global oil and gas prices.<\/p>\n While energy consumption typically fell during the warmer months, experts warned that the elevated cap was likely to persist into the high-demand winter period.<\/p>\n Cornwall said: \u201cThe bigger concern is October, when demand picks up again.\u201d<\/p>\n The report cautioned that even an end to hostilities would be unlikely to lead to a price drop because of significant \u201cphysical damage to infrastructure\u201d and long-term supply disruption.<\/p>\n Since the start of the conflict, Cornwall\u2019s forecasts have shifted<\/a> as the geopolitical situation has evolved. On March 20, it estimated the cap would rise by \u00a3332 to \u00a31,973 a year. After a fragile ceasefire, the forecast for the cap on May 13 dipped to \u00a31,929 a year, a net increase of \u00a3288.<\/p>\n