Energy bills set to jump 25% in January as Iran war sends gas prices to four-year HIGH

From the Newshound archive · first published 21 September 2026.

UK households are bracing for another cost-of-living blow, with forecasts suggesting typical annual energy bills could jump by as much as £442 from January after wholesale gas prices climbed to levels not seen since December 2022. EDF puts the likely rise at 26%, taking average bills to £2,165, while Bloomberg Economics puts the increase at around £427. The spike is being driven by fears that the Middle East conflict could disrupt gas supplies through the Strait of Hormuz, pushing wholesale gas above 208p per therm. Chancellor John Healey, whose Budget headroom has already been slashed by nearly £12 billion by Iran war borrowing costs, faces mounting pressure to act.

Liberal Democrat leader Sir Ed Davey is calling for an immediate 10p-a-litre fuel duty cut until Christmas, costing around £2bn, which he says would be self-funding.

KPMG warns Healey may be left with only £12bn in fiscal headroom by October, down from £23.6bn in the spring, making meaningful cost-of-living relief extremely difficult.

The End Fuel Poverty Coalition has written to the Chancellor demanding debt write-offs for households on means-tested benefits and an increase to the £150 Warm Home Discount.