Ofgem Confirmed A Fourth-Quarter Rise
Ofgem, the UK's energy regulator, confirmed on August 26, 2026 that its household energy price cap will rise 4 percent for the October to December 2026 period. The new cap sits at around GBP 1,723 a year for a typical dual-fuel household paying by direct debit, up from GBP 1,663 - an increase of about GBP 60 a year, or roughly GBP 5 a month. This is the second consecutive rise to the cap this year, not a one-off correction.
Ofgem's own press release put the reason plainly: continued conflict in the Middle East has kept pressure on wholesale gas markets, with wholesale prices up 11 percent over the prior three months and gas costs running roughly 27 percent higher than a year earlier. Uswitch, the independent UK price-comparison firm, published its own analysis of the same underlying figures and reached the same reading of the market.
The Number That Does Not Apply To You
Here is the detail that gets lost in every household headline: Ofgem's price cap only ever applied to domestic tariffs. It has never covered commercial or non-domestic energy contracts, and it does not start covering them now. A retailer, a restaurant, a manufacturer, or an office landlord buying electricity and gas on a business contract is not protected by the 4 percent figure, by the GBP 1,723 ceiling, or by anything resembling it.
That gap matters more than usual this quarter, because the household number is genuinely the milder of the two outcomes sitting inside the same wholesale market move. The 4 percent, GBP 60-a-year framing is real, but it describes a regulated ceiling that simply does not exist on the business side of the same energy market.
The Wholesale Move A Business Actually Faces
Strip out the household cap and look at what actually moved: wholesale gas prices rose 11 percent over the three months to Ofgem's August 26 announcement, and are running about 27 percent higher than the same point last year. Those are the figures a commercial energy buyer is exposed to directly, without a regulatory ceiling smoothing the pass-through the way the domestic cap does for the roughly 22 million UK households on default tariffs.
Put another way, the household cap absorbs part of that wholesale swing and hands consumers a capped, quarterly-adjusted 4 percent. A business on an open-market contract gets none of that absorption. When its contract comes up for renewal or repricing, the number on the table is closer to the raw 11 percent three-month move, or the 27 percent annual one, not the household figure making headlines.
Who Actually Carries This Exposure
The businesses with the most at stake are the ones where energy is a real line item rather than a rounding error: retail premises running lighting and refrigeration, hospitality venues with kitchens and heating, manufacturers running plant and machinery, offices with electric heating or cooling load, and compute-heavy or data-adjacent operations where power is close to a direct cost of doing business. For all of these, the wholesale move is the number that lands on the bill, not the capped household figure.
None of this is unique to Ofgem's jurisdiction. The underlying driver - a wholesale gas market reacting to Middle East conflict risk - reaches every buyer purchasing gas or gas-linked electricity in the UK, regardless of whether their meter sits behind a household cap or an open commercial contract.
What To Check Before The Next Renewal
Ofgem's own numbers give useful context even for a business reading them: the new GBP 1,723 cap remains about 52 percent below the roughly GBP 2,500 peak the government capped bills at during the 2022 energy crisis, so this is a rise inside a market still well off its worst point, not a return to crisis pricing. That is genuine reassurance for a household bill. It is not reassurance for a business contract, because the 52 percent comparison is measured against the same capped household metric that never applied to commercial users in the first place.
The practical step is simple: any owner with a commercial gas or electricity contract coming up for renewal should ask their supplier for the current wholesale-linked rate now, rather than budgeting off the 4 percent figure dominating the household coverage. The table below sets the two exposures side by side.
| Metric | Household default tariff (Ofgem-capped) | Business or non-domestic contract |
|---|---|---|
| Oct-Dec 2026 change | +4 percent (about GBP 60/year) | No cap; tracks wholesale market |
| Regulatory ceiling | Yes, set by Ofgem | None |
| Underlying wholesale gas move, 3 months | Same market | +11 percent |
| Underlying wholesale gas move, year-on-year | Same market | About +27 percent |
| Accounts affected | About 22 million households | Not centrally tracked by Ofgem |
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