Energy Price Cap to Rise by 5 Percent for British Households

The cap sets a maximum that is allowed to be charged to British customers for energy bills and is now 1,834 British pounds a year. The plan is driven almost entirely by rising costs in the international wholesale energy market, "due to market instability and global events, particularly the conflict in Ukraine," Ofgem said.

According to the regulator, a typical household in England, Scotland and Wales is estimated to use 2,700 kilowatt-hours (kWh) of electricity and 11,500 kWh of gas in a year.

"This is a difficult time for many people, and any increase in bills will be worrying," Ofgem Chief Executive Official Jonathan Brearley said, noting that it is important that customers are supported.

The rise in energy bills once played a big part in soaring inflation, dealing a huge blow to British households. Though it has dropped from the high levels seen last winter, energy price is still considered a huge financial burden.

"Amid the cost-of-living crisis, the last thing households need is a rise in energy bills, especially going into the winter months," Craig Lowrey, principal consultant at market researcher Cornwall Insight, said.

While it seemed like the outlook for consumer bills was improving earlier this year, "new challenges have arisen, and our reliance on foreign energy has once again left the UK vulnerable to price increases caused by events around the globe," Lowrey added.

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