UK Households Warned of Soaring Energy Bills as Gas Prices Spike

Households across the UK are bracing for higher energy bills this winter due to a natural gas price spike. Wholesale natural gas prices have reached three-year highs, with European benchmark prices topping €75/MWh on Wednesday. The UK's natural gas price has also hit its highest level since late 2022, at 185p per therm.

Analysts are attributing the surge in wholesale gas prices to the prolonged closure of the Strait of Hormuz, which has affected oil and liquefied natural gas (LNG) transport. Hamad Hussain, senior climate and commodities economist at Capital Economics, predicts that the waterway won't reopen until early 2027, putting further pressure on energy prices.

Higher wholesale gas prices will feed through to household energy bills in the UK, with regulator Ofgem's price cap expected to increase by 4% in October. Analysts at Cornwall Insight have forecast domestic energy prices could rise a further 9% in the new year, bringing renewed concern to households during the coldest months.