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Money & Inflation Dec 10, 2025 1 min read

UK Energy Price Cap Set to Fall in 2026 — What It Means for Bills and Inflation

The UK energy regulator Ofgem has signalled that wholesale gas and electricity price trends may push the price cap down in early 2026. Here’s what this could mean for inflation, households and budgeting.

UK Energy Price Cap Set to Fall in 2026 — What It Means for Bills and Inflation

The UK’s energy regulator, Ofgem, has indicated that easing wholesale prices could lead to a lower energy price cap in early 2026. While bills remain high compared with pre-2020 levels, this trend may bring some relief to households facing winter pressure.

🔗 Wholesale price trends:
https://www.reuters.com/world/uk/uk-energy-price-cap-seen-falling-2026-analysts-say-2025-12-05/


📉 Why the Cap May Fall

  • European gas storage levels are high entering winter.
  • Global LNG supply has stabilised.
  • Lower demand and milder weather forecasts are easing price pressure.

Analysts say the cap could fall another 5–8% by spring 2026.
Source: Reuters Economics UK.


🏠 Impact on Households

  • Bills may ease slightly, but still remain above historical averages.
  • Households with fixed tariffs may not benefit immediately.
  • Standing charges remain a concern for many consumers.

📈 Inflation Outlook

Lower energy bills could reduce pressure on the UK’s CPI inflation rate in early 2026, according to forecasters.
This may support real-income recovery and help households plan budgeting more effectively.


💬 Final Note

This article is for general informational purposes only. It does not constitute financial or energy advice.


Sources:
https://www.reuters.com/world/uk/uk-energy-price-cap-seen-falling-2026-analysts-say-2025-12-05/
https://www.ofgem.gov.uk/

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