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Ofgem to raise price cap in October, with more bill increases forecast in January

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Ofgem has today announced the October (Q424) Default Tariff Cap (price cap) at £1,717 a year for a typical dual fuel consumer1. This is a 10% increase from July's cap set at an annual rate of £1,568. Wholesale price rises, particularly since the start of July, have been cited as the key reason for the increase in bills, with GB's reliance on imports - particularly of gas - making it vulnerable to the volatile international energy market.  

New forecasts from Cornwall Insight indicate that this may not be the last of the increases. The January 2025 (Q125) cap is currently projected to rise by an additional £45 to £1,762 (Figures 1 and 2), this would mark a 3% increase from October's cap.

The October increase - and the forecast rise in January - will put more pressure on the government to introduce measures, such as social tariffs, which could shield vulnerable households from some of the effects of these hikes during the winter period.

It may also increase calls for the price cap to be reformed or scrapped altogether. Critics argue that the cap is a distraction to the overriding concerns in the energy market at best and at worst risks impeding competition and customer choice. Ofgem is currently undertaking a comprehensive review of the cap as part of its assessment of general consumer protection measures, and we await the findings.  

Figure 1: Cornwall Insight's Default Tariff Cap forecast using new Typical Domestic Consumption Values (dual fuel, direct debit customer) 

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