Energy shock starts to bite in Europe: UK household bills set for 'deeply unwelcome' 2-year high
The U.K. is facing a significant increase in household energy costs due to supply constraints linked to the ongoing Iran war. Ofgem announced a 13% rise in its energy price cap, with gas bills expected to soar by 24%. This situation reflects broader volatility in global energy markets, impacting households across Europe as well.
- ▪Ofgem's energy price cap will rise by 13% in July, reaching its highest level in two years.
- ▪Gas bills are expected to increase by 24%, while electricity prices will rise by around 5%.
- ▪The U.K. is heavily reliant on imported energy, making it vulnerable to global supply disruptions.
- ▪Energy prices in the euro zone have also surged, with a reported increase of 10.8% in April from the previous year.
- ▪The U.K. government is monitoring the situation and plans to address cost pressures on households.
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Supply constraints sparked by the Iran war will drive household energy costs in the U.K. to their highest level in two years over the summer, the country's energy regulator said on Wednesday. Government watchdog Ofgem announced its energy price cap would rise by 13% in July, with electricity prices increasing by around 5% and gas bills soaring 24%. Ofgem's price cap limits how much households in the U.K. can be charged for energy utilities, and is reviewed every three months."Today's price change reflects continued volatility in global energy markets. This means higher wholesale gas prices, driven by ongoing conflict in the Middle East, is impacting the price we pay for energy," Ofgem CEO Tim Jarvis said in a statement on Wednesday.
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