Ofgem has confirmed household energy bills will fall by around 7 per cent from July in its latest price cap update.
The regulator said on Friday that the typical bill is expected to fall by £129 to £1,720 per year when its new price cap comes into force.
The price cap, which sets the limit on how much firms can charge customers per unit of energy, is currently at around £1,849 for a typical household after three consecutive increases in bills.
It comes after US president Donald Trump’s aggressive tariff plans led to a significant slump in gas and oil prices.
However, the drop is slightly less than the previously forecast 9 per cent fall following an easing of trade tensions in recent weeks.
News of a fall in energy costs will come as a relief for households, who suffered through an “awful April” of bill rises, including Ofgem’s last 6.4 per cent price cap increase.
Under-pressure households have also been hit with the biggest increase to water bills since at least February 1988, alongside steep increases across bills for council tax, mobile and broadband tariffs, as well as road tax.
Bill rises have led to Consumer Prices Index (CPI) inflation jumping to 3.5 per cent in April, up from 2.6 per cent in March and the highest since January 2024.
On Monday, Craig Lowrey, principal consultant at Cornwall Insight, said: “The fall in the price cap is a welcome development and will bring much-needed breathing space for households after a prolonged period of high energy costs.
“It’s a step in the right direction, but it should be taken in context.
“Prices are falling, but not by enough for the numerous households struggling under the weight of a cost-of-living crisis, and bills remain well above the levels seen at the start of the decade.
“As such, there remains a risk that energy will remain unaffordable for many.”
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