Millions of UK households could see welcome relief in their energy bills this summer, with annual costs expected to fall by £166 from July, according to the latest analysis by Cornwall Insight.
If realised, the drop would bring the typical annual dual-fuel bill—paid via direct debit—down to £1,683, marking the first reduction in Ofgem’s price cap after three consecutive hikes.
The energy price cap, which currently applies to around 22 million households across England, Scotland and Wales, is adjusted quarterly by the regulator Ofgem. It’s designed to reflect the wholesale cost of energy and limit the price suppliers can charge per unit of gas and electricity.
While the cap doesn’t directly cap total bills, it sets the benchmark for typical usage. That means households using more than the average will still face higher costs.
In July 2023, the average annual bill sat at £1,568. Since then, prices have climbed with each quarterly update—until now.
If Cornwall Insight’s forecast proves accurate, the predicted 9% drop in July will see prices fall to their lowest since September 2023.
Cornwall Insight has also suggested that bills could continue to ease slightly in October, with a further reduction likely in January 2026.
But the outlook remains uncertain. “While a fall in bills will always be welcomed by households, we mustn’t get ahead of ourselves.
We have all seen markets go up as fast as they go down, and the very fact the market dropped so quickly shows how vulnerable it is to geopolitical and market shifts,” said Craig Lowrey, principal consultant at Cornwall Insight.
“There is, unfortunately, no guarantee that any fall in prices will be sustained. The only real way to protect households from this constant cycle of instability and insecurity is to reduce our dependence on international wholesale markets.”
The anticipated drop in energy prices is mainly attributed to falling wholesale costs, which suppliers pay for gas and electricity. These have been influenced by a combination of geopolitical developments and milder weather across Europe, which has curbed demand.
US tariff decisions have also played a role in shaping market trends, indirectly easing the pressure on global energy prices. While a fall in energy bills will be a sign of relief for many, the situation remains volatile. Any sense of long-term stability is still out of reach.
Analysts and consumer advocates alike are urging households to remain cautious, keep an eye on market developments, and continue efforts to use energy efficiently. For now, though, the predicted July drop is a small win in a financially turbulent time.
