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World risk · Energy and resources · Gulf & Hormuz (Iran war)

UK household energy price cap jumps 10% or more in January or April 2027

The test Ofgem announces a cap for 1 Jan-31 Mar 2027 or for 1 Apr-30 Jun 2027 that is 10% or more above the previous period's cap for a typical dual-fuel direct-debit household, on Ofgem's own announced figures.

Not under way · Confidence: medium · Reviewed 28 Oct 2026 · Scores from 1 to 10

This page answers: What could happen, how it is scored, and who is exposed?

Using this page
  1. Read the two scores: Likelihood and Impact are kept apart.
  2. Check what is happening, each fact with its source.
  3. Use the calendar for the dates to watch.

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Likelihood
6Elevated steady this month
Impact
4Elevated steady this month
Breadth3
Depth4
Duration4
Hard to substitute3
Canada pointNot added0

Impact is the average of the four parts, rounded, plus one point when Canada is directly hit on two or more channels, up to 10.

Two separate scales from 1 to 10. Strature never multiplies or merges them.

What changed

Dated, newest first

  1. Budget 28 Oct 2026: GBP 100 Household Energy Payment for up to 20 million households in England (council tax bands A-D) from January 2027, paid directly into bank accounts or through the Council Tax system (the Budget document names both), outside the cap; no measure dated to change VAT, levies or standing charges in the January cap; the standing-charge change has no date [15]
  2. Budget 28 Oct 2026: electricity VAT cut extended to July 2027, expected to take about GBP 50 off the annual cap in April 2027; planned Gas Shipper Obligation scrapped; gas standing charges to be abolished from 2027 onward, no date set [15]
  3. HM Treasury news story, 28 Oct 2026: electricity VAT cut extended until 1 Jul 2027; the government will ask Ofgem to abolish gas standing charges and move them to unit rates [19]
  4. Jackdaw cleared 21 Oct 2026: about 6% more UK gas output at peak; first gas as early as end of October; Energy Wealth Fund GBP 2bn [7]
  5. Cornwall forecast page updated 14 Oct 2026 using close-of-play prices from 28 Sep [6]
  6. Cornwall Insight: after the E.ON-OVO deal three suppliers serve about three quarters of British homes (74% of the domestic market) [14]
Show 4 earlier changes
  1. Qatar about 7% of UK LNG imports in 2025, US 68% [8]
  2. Cornwall Insight forecasts GBP 1,999.28 from January 2027, up 16% (GBP 276), largest since January 2023; September rises locked in; EU storage about 65% at start of September, lowest September in 15 years [5]
  3. Ofgem is due to announce the January-March 2027 cap on 25 Nov 2026, as reported (low-confidence source) [17]
  4. Cornwall Insight's August forecast for January was about 9% (GBP 1,878), as reported [10]

Why it matters

Ofgem's cap rose in July and October 2026 because Middle East fighting pushed up wholesale gas: by 13% and then 4%, to GBP 1,723 a year for a typical dual-fuel home. Cornwall Insight now forecasts GBP 1,999 from 1 January 2027, up 16%, the largest rise since January 2023. The Budget of 28 Oct extended the electricity VAT cut to July 2027, worth about GBP 50 a year off the cap from April 2027, and its GBP 100 Household Energy Payment is paid outside the cap; on Cornwall's figures the January rise would still be about 16% (Strature calculation).

Why Likelihood 6 Pushes: Cornwall's forecast of a January rise well above the threshold, on prices to 28 Sep, with September rises locked in; EU storage at its lowest September level in years.

Why Impact 4 Threshold case a 10% rise in one quarter's cap.

The other facts on file (6)
  • Cap up 4% from 1 Oct 2026, GBP 1,663 to GBP 1,723; gas bills +8%; electricity flat after VAT removal; about GBP 45 higher without it [1] (26 Aug 2026)
  • Wholesale allowance +11%, 47% of the cap (44% before); gas allowance +13%, electricity +10%; Middle East conflict the primary driver; electricity VAT zero 1 Oct 2026 to 31 Mar 2027, gas 5% [2] (26 Aug 2026)
  • Cap up 13% from 1 Jul 2026 (gas about 24%, electricity about 5%); wholesale prices +28% in three months [3] (27 May 2026)
  • Cap up 0.2% from 1 Jan 2026 to GBP 1,758 (letter of 21 Nov 2025) [11] (21 Nov 2025)
  • Cap down 7% from 1 Apr 2026 to GBP 1,641 (letter of 25 Feb 2026) [12] (25 Feb 2026)
  • Cap up 10% from 1 Oct 2024 to GBP 1,717 [13] (23 Aug 2024)

Where it sits

Strait of Hormuz11. UK household energy price cap jumps 10% or more in January or April 2027: Elevated impact · possible1 · Elevated impact · possibleStrait of HormuzAFGHANISTANUAEIRANIRAQKUWAITOMANSAUDI ARABIATHE GULF0500 kmat 26°NMap data: Natural Earth (public domain).
Strait of Hormuz11. UK household energy price cap jumps 10% or more in January or April 2027: Elevated impact · possibleStrait of HormuzUAEIRANKUWAITOMANTHE GULF0300 kmat 26°NMap data: Natural Earth (public domain).

How it spreads

If

Ofgem announces a cap for 1 Jan-31 Mar 2027 or for 1 Apr-30 Jun 2027 that is 10% or more above the previous period's cap for a typical dual-fuel direct-debit household, on Ofgem's own announced figures.

Not under way

Channels 4 on the card

  1. CanadaNo Canadian loss sourced.
  2. HouseholdsA 10% rise adds about GBP 172 a year to a typical default bill; Cornwall's forecast adds GBP 276.
  3. Inflation and ratesEnergy feeds UK CPI and the Bank of England's rate path.
  4. Public financesSupport of a GBP 100 Household Energy Payment, GBP 2.6bn in all (paid outside the cap), after the electricity VAT cut already in place, now extended to July 2027.

Sectors 1

  • Energy and pipelines

Who is exposed

Countries
United Kingdom, European Union, Qatar
Sectors
Energy and pipelines
Goods
Natural gas, LNG, Electricity

Three scenarios and their signposts

  1. S1

    The jump

    January rises 10% or more, as Cornwall forecasts.

  2. S2

    April relief only

    January jumps, April falls back on the Budget cut.

  3. S3

    Relief

    A US-Iran text or Hormuz reopening drops wholesale gas; both caps rise little or fall.

The signposts of each scenario
PathSignpost
S1Ofgem's January announcement, on 25 Nov 2026 as reported (low-confidence source)
S2Ofgem's January figure, on 25 Nov 2026 as reported (low-confidence source)
S3Wholesale gas back below its pre-July level

No probability is given for the three paths.

Dates to watch

Calendar

The dates to watch

A dot is a day, a bar a month or a year; a hollow mark is tentative. The line marks today.

  1. 25 Nov 2026 Ofgem announces the cap for 1 Jan-31 Mar 2027 (as reported, low-confidence source) [17] Tentative · Outside event

    Remind me

  2. 1 Jan 2027 New cap period starts [4] Declared · Outside event

    Remind me

  3. Feb 2027 Ofgem announces the cap for 1 Apr-30 Jun 2027 [12] Tentative · Outside event
  4. Jul 2027 Electricity VAT cut ends (extended by the Budget from 31 Mar 2027) [15] Declared · Outside event

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SourceStrature world-risk card; the dates cite the sources below.
Exhibit R-3 · UNITED KINGDOM · strature.net

The other side

Jackdaw supplies gas from this winter and the new Energy Wealth Fund starts with GBP 2bn for renewable and low-carbon energy. Fixed tariffs were on offer at GBP 100 or more below the October cap, and Ofgem counts about 35% of households on fixes that a cap rise does not touch.

Connected in Strature

Sources

16 sources, numbered as the text cites them

  1. Energy price cap will rise by 4% from October 2026. Ofgem · 26 Aug 2026 · Official · confidence high · retrieved 25 Oct 2026
  2. Energy price cap (default tariff) update from 1 October 2026. Ofgem · 26 Aug 2026 · Official · confidence high · retrieved 26 Oct 2026
  3. Energy price cap will rise by 13% from July. Ofgem · 27 May 2026 · Official · confidence high · retrieved 26 Oct 2026
  4. Energy price cap (default tariff) levels. Ofgem · 26 Oct 2026 · Official · confidence high · retrieved 26 Oct 2026
  5. 16% Price Cap Rise Forecast in January. Cornwall Insight · 30 Sep 2026 · Industry · confidence medium · retrieved 26 Oct 2026
  6. Default Tariff Cap (Price Cap) Predictions & Insights; Press and media. Cornwall Insight · 14 Oct 2026 · Industry · confidence medium · retrieved 26 Oct 2026
  7. Jackdaw gas field gets green light. GOV.UK (DESNZ, HM Treasury) · 21 Oct 2026 · Official · confidence high · retrieved 26 Oct 2026
  8. United Kingdom dossier, rows GBR-gulf-war-hormuz-scope-2 and GBR-canada-capital-projects-scope-2. Strature library (Electric Insights; Shell) · 6 Oct 2026 · Think tank · confidence medium · retrieved 25 Oct 2026
  9. GBP 1,723 in October, GBP 1,878 by January (citing Cornwall Insight via BBC News). Gilt Edge · 9 Sep 2026 · Commentary · confidence low · retrieved 26 Oct 2026
  10. Energy price cap (default tariff) update from 1 January 2026. Ofgem · 21 Nov 2025 · Official · confidence high · retrieved 26 Oct 2026
  11. Energy price cap (default tariff) update from 1 April 2026. Ofgem · 25 Feb 2026 · Official · confidence high · retrieved 26 Oct 2026
  12. Changes to energy price cap between 1 October to 31 December 2024. Ofgem · 23 Aug 2024 · Official · confidence high · retrieved 26 Oct 2026
  13. Three Energy Firms to Supply Three Quarters of British Homes After E.ON-OVO Deal. Cornwall Insight · 7 Oct 2026 · Industry · confidence medium · retrieved 26 Oct 2026
  14. Budget 2026 document. HM Treasury, GOV.UK · 28 Oct 2026 · Official · confidence high · retrieved 28 Oct 2026
  15. Martin Lewis warns of potential energy price cap rise in January. AZAT TV · 16 Sep 2026 · News · confidence low · retrieved 27 Oct 2026
  16. Budget 2026: Breathing space for today, hope for the future. HM Treasury, GOV.UK · 28 Oct 2026 · Official · confidence high · retrieved 28 Oct 2026

Reviewed 28 Oct 2026 · version 2 · last change: trend up to flat · All risks