January price cap: a rise of 20% or more is now looking likely as gas climbs again

Update, 16 October 2026: forecasts have risen again. E.ON Next is now at £2,130 (12 Oct) and British Gas at £2,185 (15 Oct), so the suppliers no longer agree on +21%. Our central figure is now about £2,150 (+25%). Read the latest.

UK wholesale gas climbed back above 200p a therm on 12 October, reaching about 207p, its highest level in four weeks, after fresh attacks on tankers in the Gulf. That is close to double where it stood in the spring. On the same day Martin Lewis said the weekend's news was “cementing the likelihood of around 20% or bigger rises in the energy Price Cap in January”.

The supplier forecasts already agree. British Gas, EDF and E.ON Next all updated on 5–6 October and now sit within £8 of each other, at £2,080 to £2,088 a year for a typical dual-fuel household paying by Direct Debit. That is about 21%, or roughly £360, above the £1,723 cap in force now.

Why every expensive day now counts

Ofgem sets the January cap from average wholesale prices over an assessment window running from 19 August to 17 November. That window is now more than halfway through. Gas spent much of September above 170p a therm, well above where it was when the window opened, and those days are already locked into the average. Each further day above 200p pulls the average up again, and there are only five weeks left for a fall to pull it back down.

Gas matters for electricity too, because gas-fired power stations set the wholesale electricity price for much of the time. The Middle East conflict is the main driver: about a fifth of the world's traded LNG passed through the Strait of Hormuz before the war, and European gas storage is lower than at this point last year.

The latest forecasts

All figures use Ofgem's current typical household of 2,500 kWh electricity and 9,500 kWh gas a year. Cornwall Insight's £1,999 was published on 30 September, before October's rise in gas, so expect its next update to come in higher.

Two suppliers have also published early April 2027 forecasts, both marked low confidence: British Gas expects a small fall to about £1,995, and E.ON Next a further rise to about £2,131. Either way, nobody is forecasting a return to October's £1,723 by spring.

What it could mean for your bill

A percentage rise in the cap lands on most bills at roughly the same percentage. Here's the extra cost at an annual rate, depending on what you pay now:

For your own usage, the savings calculator applies the January forecast to your bill and puts it next to today's fixed rate.

Octopus has repriced its fixes

The same wholesale rise has reached fixed tariffs first. Octopus replaced its 12- and 18-month fixes on 10 October, eight days after the last change, and both went up. Averaged across its 14 regions for a typical household:

That changes the sums. At about £1,900, the 12M Fixed costs roughly £44 more than the cap over October to December and saves roughly the same again from January to March if the cap lands near £2,080. It only comes out ahead if prices stay high after April. The 18M Fixed, at about £1,792, is now the stronger deal: only about £17 more than the cap this quarter and around £72 less next quarter, with 18 months of certainty in exchange for the longer lock-in and a higher exit fee.

• Fix prices are moving faster than the cap. They follow today's forward market, so if gas keeps climbing, the next repricing will probably be higher again.
• Your region matters. The 12M Fixed ranges from about £1,834 to £2,001 a year depending on where you live. Check the live quote for your postcode.
• Martin Lewis's advice is to compare the whole market for the cheapest fix rather than assume any one supplier wins.

If you're not sure yet, switch to Flexible Octopus now. It follows the cap, has no exit fee, gets you the £50 referral credit, and lets you move onto a fix from your account later. Our guide to fixing or staying variable works through the decision in detail.

Ofgem confirms the January cap by 25 November. Every forecast goes on our price cap predictions tracker as it lands, and our 1 October report covers Cornwall Insight's fuel-by-fuel forecast.

Sources: MoneySavingExpert — price cap predictions, E.ON Next, British Gas, Trading Economics — UK natural gas, Octopus Energy product data and Ofgem. Figures last checked 12 October 2026.