Energy bills set to fall in July, offering relief for households and businesses

Consultancy Cornwall Insight predicts that the typical annual household bill will drop by £166, bringing the average dual-fuel bill for a direct debit customer down to £1,683 — a fall of nearly 9%.

The energy price cap, which governs unit rates for around 22 million households in England, Wales, and Scotland, is reviewed quarterly by Ofgem. While the cap does not limit the total bill — higher usage still means higher costs — it offers a benchmark based on typical consumption.

The anticipated reduction would be the first decrease since July 2024, when the average bill stood at £1,568. Subsequent increases pushed costs higher, reaching £1,849 in April 2025. If realised, July’s forecasted drop would return prices to their lowest level since September last year.

Cornwall Insight also expects modest further falls in October 2025 and January 2026, although analysts have warned that the energy market remains volatile.

"While a fall in bills will always be welcomed by households, we mustn't get ahead of ourselves," said Craig Lowrey, principal consultant at Cornwall Insight. "Markets can rise as quickly as they fall, and the very fact the market dropped so quickly shows how vulnerable it is to geopolitical and market shifts. There is unfortunately no guarantee that any fall in prices will be sustained."

The consultancy added that the primary driver behind the falling prices is a drop in the wholesale cost of energy, influenced by changes to US tariffs policy and warmer-than-expected weather across Europe.

Business Customers to Benefit Too

While the domestic price cap offers direct protection to households, businesses — which negotiate their own energy contracts — are not shielded in the same way. However, the decline in wholesale energy prices could also ease costs for firms renewing their contracts.

"Falling wholesale energy prices are a positive sign for businesses across the UK, even though they do not benefit from Ofgem’s price cap protections," said Chris Richards, a business energy expert at Utility Saving Expert. "Companies coming to the end of fixed deals, or those on variable rates, may see more competitive offers emerging in the second half of the year. That said, as with households, businesses must remain cautious — volatility is still a real risk."

Despite the positive forecasts, analysts caution that international market pressures could quickly reverse gains. Reducing the UK’s reliance on volatile global wholesale markets remains a key long-term challenge, according to industry experts.

Find out more at utilitysavingexpert.com.