The energy price cap may fall by 7% for households in July, latest predictions from industry analysts Cornwall Insight shows. The drop, anticipated ahead of the April price cap rise, may offer some relief to customers after a period of rising energy costs.
According to Cornwall Insight’s updated forecasts, the energy price cap for July is projected to fall to £1,712 per year for a typical dual-fuel household. This is slightly lower than earlier predictions made in February, marking a 7% reduction from April’s £1,849 cap. This would result in an average saving of £137 per year for the typical customer. Dr Craig Lowrey, principal consultant at Cornwall Insight, welcomed the drop but cautioned that wholesale market volatility and the UK’s reliance on energy imports could cause future price fluctuations. He said: « Household bills remain vulnerable to sudden shocks. »
Despite the anticipated drop in the energy price cap, energy expert Elise Melville from Uswitch.com explained how switching to a fixed tariff priced lower than the new cap could lead to even greater savings.
Fixed deals protect customers from price rises for 12 months or more by enabling them to lock in rates.
Ms Melville said: “A predicted fall in the July energy price cap might sound like good news, but the long-term outlook remains uncertain, and there’s no guarantee that prices will definitely come down. If you have not switched in over a year, you are likely to be on a standard tariff and will be paying more than you need to for your energy.”
According to Ofgem, around 22 million households were still on a standard variable tariff in February.
Ms Melville continued: “Consumers can easily avoid the ups and downs of the price cap. The average household on a standard tariff could save around £151 a year compared with predicted July rates by switching to a fixed deal now.”
According to Uswitch, the cheapest energy-only dual-fuel tariff, Outfox the Market’s Outfox the Price Cap (Apr 25) 12M Fix’d Dual v2.0, offers an average annual bill of £1,605, fixed for 12 months, at the time of writing.
EDF Energy’s Simply Fixed Jul26 tariff currently offers an average annual bill of £1,639, fixed for 16 months.
OVO Energy’s Extended Fixed 28 March 2025 tariff also offers an average annual bill of £1,639, fixed for 15 months.
Conrwall Insight predicts the energy price cap to rise again in October before falling again in July 2026, which means fixing a deal now could provide stability and savings over the next year or more.
However, it added: “Volatility in the global energy markets remain a key variable, and therefore this view will be subject to change.”
What is the energy price cap?
The energy price cap was introduced in 2019 by the regulator Ofgem to prevent service providers from making excessive profits from customers.
Ofgem reviews the energy price cap every three months. The cap sets the maximum amount that energy providers can charge per unit of energy (measured in pence per kilowatt-hour, or p/kWh) based on wholesale energy prices.
However, the cap does not limit the total bill a household pays. Households still pay for the energy they consume, meaning if usage increases, so will the total bill, even if the per-unit price is capped. The price cap only regulates how much energy providers can charge per unit, not the overall cost based on how much energy is consumed.
