British households on standard variable tariffs woke up to lower energy bills from April 1, with Ofgem’s quarterly price cap falling 6.6% from £1,758 to £1,641 per year — a saving of approximately £117 annually, or roughly £10 per month for a typical household paying by Direct Debit.
The reduction reflects wholesale gas prices recorded in the assessment period running from December 2025 to February 2026 — a window that predates the Iran war entirely, meaning the cap was set in a world that no longer exists.
Energy consultancy Cornwall Insight had already updated its July forecast to £1,963 — a projected increase of £322 from the April cap that would not only wipe out Tuesday’s saving but push bills £205 higher than they were at the start of 2026. E.ON Next has its own July projection at £1,955, closely aligned with the Cornwall figure.
The mechanism is blunt and unavoidable. Wholesale gas prices move on global supply and demand dynamics, and the Strait of Hormuz — through which approximately 20% of global oil and gas ordinarily passes — has been effectively closed to commercial traffic since February 28. That single chokepoint closing has cascaded into every wholesale gas contract priced since.
British Gas confirmed through its official consumer communications that the July cap will reflect current market conditions and urged customers who value certainty to consider switching to a fixed tariff now, while warning that fixed deals are already more expensive as suppliers price in the expected uplift.
The Bank of England’s decision to hold rates at 3.75% in March — abandoning what had been an expected cut — puts further pressure on households already managing higher mortgage costs alongside the energy trajectory. Two-year fixed mortgage rates climbed from 4.83% to 5.32% during March, a 49 basis point increase in a single month.
Food costs will add further pressure through the summer. The Institute for Grocery Research’s 8% food inflation forecast for summer aligns with the fertiliser and shipping cost increases that farmers and retailers have been flagging since the conflict disrupted supply chains in March.
The April cap reduction is real and welcome for the roughly 60% of households on standard variable tariffs. But forecasters, energy suppliers and the government’s own analysts are aligned on a view that it is a temporary reprieve rather than a turning point.