The energy price cap may fall by 9% for households in July, the latest predictions from industry analysts Cornwall Insight show. Following April’s price cap rise, the drop may offer some relief to customers after a period of rising energy costs.
According to Cornwall Insight’s updated forecasts, the energy price cap for July 2025 is projected to fall to £1,683 per year for a typical dual-fuel household. This is slightly lower than earlier predictions made in March, marking a 9% reduction from April’s £1,849 cap. This would result in an average saving of £166 per year for the typical customer. Dr Craig Lowrey, principal consultant at Cornwall Insight, welcomed the drop but cautioned, “We mustn’t get ahead of ourselves.”
He explained: “There is, unfortunately, no guarantee that any fall in prices will be sustained, and there is always the risk of the market rebounding.”
Cornwall Insight has attributed the drop to a decline in wholesale gas prices, driven by a mix of geopolitical and market developments. This includes the impact of President Trump’s tariffs, as well as above-average temperatures, which have reduced demand expectations and “eased pressure” on short-term prices.
Dr Lowrey added: “We have all seen markets go up as fast as they go down, and the very fact the market dropped so quickly shows how vulnerable it to geopolitical and market shifts.”
Despite the anticipated drop in the energy price cap, energy expert Elise Melville from Uswitch highlighted how switching to a fixed tariff priced lower than the new cap could lead to even greater savings.
Fixed deals protect customers from price rises for 12 months or more by enabling them to lock in rates.
Ms Melville said: “A summer-time fall in the price cap might sound like relief for under-pressure households – but this forecasted reduction is a drop in the ocean compared with the savings available by getting a fixed deal. For most households, if you haven’t switched in a year or more, you are probably on a standard tariff, and effectively throwing money out of the window.”
She added: “There are a number of fixed deals on the market cheaper than the predicted July rates. The average household on a standard tariff could save around £258 a year by switching compared with the current price cap, which also beats the latest July prediction.”
According to Uswitch, the cheapest energy-only dual-fuel tariff, Outfox the Market’s Outfox the Price Cap (Apr 25) 12M Fix’d Dual v3.0, offers an average annual bill of £1,591, fixed for 12 months, at the time of writing.
E.ON Next’s Fixed v49 tariff currently offers an average annual bill of £1,623, fixed for 12 months.
Co-op Energy’s Fixed April 2025 v2 tariff also offers an average annual bill of £1,659, fixed for 15 months, with no early exit fees.
These deals are priced below April’s price cap and Cornwall Insight’s forecasted July cap.
Cornwall Insight forecasts a slight drop in the price cap this autumn. If you’re considering fixing your rate but worried prices might fall further, some tariffs are early exit fee-free. Others can charge between £25 to £75 per fuel, so it’s important to check the terms and conditions before signing up.
What is the energy price cap?
The energy price cap, introduced in 2019 by the energy regulator Ofgem, prevents service providers from making excessive profits from customers.
Ofgem reviews the energy price cap every three months. The cap sets the maximum amount that energy providers can charge per unit of energy (measured in pence per kilowatt-hour, or p/kWh) based on wholesale energy prices.
However, the cap does not limit the total bill a household pays. Households still pay for the energy they consume, meaning if usage increases, so will the total bill, even if the per-unit price is capped. The price cap only regulates how much energy providers can charge per unit, not the overall cost based on how much energy is consumed.
