Cornwall Insight's final forecast puts the October price cap at £1,729 a year, around £66 more than now

Household energy bills are on course to rise by around 4% from October, according to the final forecast from Cornwall Insight, the consultancy whose quarterly predictions now shape the public conversation about bills before the regulator has said a word.

The forecast, published on 19 August, puts the default tariff cap for October to December at £1,729.31 a year for a household with typical consumption. The current cap, covering July to September, is £1,663. That is a difference of roughly £66 over a year, or a little over £5 a month.

Ofgem is due to confirm the actual figure by Wednesday. The cap does not limit what any household pays in total — it caps unit rates and standing charges, so a home that uses more still pays more.

At a glance

• Cornwall Insight forecasts an October to December cap of £1,729.31 for typical consumption
• The current July to September cap is £1,663, making the expected rise around £66 a year
• The forecast splits as £866.63 for electricity at 2,500 kWh and £862.68 for gas at 9,500 kWh
• Ofgem must confirm the October cap by 26 August 2026
• The figure already includes the removal of VAT from electricity bills announced on 21 July
• Under the pre-July consumption benchmark the same forecast would read £1,940.69

Why the headline number changed shape this year

Comparing this October's cap with last year's is harder than it looks, because the yardstick moved. On 1 July 2026 Ofgem changed its typical domestic consumption values — the assumed annual usage of a benchmark household — from 2,700 kWh of electricity and 11,500 kWh of gas to 2,500 kWh and 9,500 kWh.

That change lowers the headline annual figure without changing anybody's bill by a penny, because it alters the size of the imaginary household used to express the cap. On the old benchmark, Cornwall Insight's same forecast would be £1,940.69. Any comparison with a figure quoted before July needs to specify which benchmark it uses.

The VAT cut is already in the number

The forecast incorporates the cut in VAT on electricity bills announced by the government on 21 July. That reduction is worth 5% on the electricity element and is one of the reasons the October figure is not higher than it is.

It is also why earlier forecasts looked worse. Cornwall Insight had previously modelled an October cap well above £1,900 on the old consumption benchmark; the combination of the VAT change and the new benchmark accounts for most of the gap between that number and the one now expected. The underlying wholesale picture has not improved as much as the headline movement implies.

What a £66 rise means in practice

For a household on the cap paying by direct debit, an increase of about £5.50 a month arrives at the point in the year when consumption starts climbing. The cap is an annualised figure, but usage is not evenly spread: the bulk of a year's gas is burned between October and March, so the rise bites hardest in exactly the months when the meter runs fastest.

Households on fixed tariffs are unaffected until their deal ends. Fixed offers priced below the cap exist in the market, and the gap between the cheapest of them and the cap is the practical decision most billpayers face this month.

Standing charges remain the sore point

The cap sets a maximum daily standing charge as well as a maximum unit rate, and the standing charge is the part that does not fall however little energy a household uses. For low-consumption homes — small flats, single occupants, people who have already cut usage to the bone — the standing charge is a rising share of the bill and is largely immune to efficiency measures.

That structural complaint has followed every cap announcement for several years and will not be resolved by this one. It is also the reason the headline annual figure, pegged to a typical household that many billpayers do not resemble, is a poor guide to any individual bill.

What happens next

Ofgem's announcement is due by 26 August and takes effect on 1 October, running to 31 December. Cornwall Insight's final forecasts have historically landed close to the regulator's figure, but they are a model of the same inputs rather than a preview of the decision, and a difference of a few pounds either way would not be unusual.

The more consequential question is the following quarter. Winter demand, wholesale gas prices and the shape of the government's energy policy will all feed into the January cap, and none of those is settled.