Donald Trump’s trade war means lower energy bills for British households, according to a leading forecaster, after the economic shock waves triggered by US trade tariffs caused global gas market prices to slide.
Cornwall Insight predicts the UK government’s cap on energy bills will fall by 9% from July, or £166 for the average household annual bill.
The falling wholesale gas price means the cap on how much suppliers can charge for their energy will drop to the equivalent of £1,683 a year for the typical household, down from the £1,849 a year set in April.
The lower energy costs are likely to be welcomed by bill payers after energy debts across the country climbed to a record high of £3.8bn. However, the average bill will still be one-third higher than before Russia’s invasion of Ukraine triggered a global gas crisis and rocketing market prices.
The energy regulator for Great Britain, Ofgem, sets a price cap on household energy bills every quarter by using a formula that tracks wholesale energy prices, as well as providers’ network costs.
Market prices have fallen in recent weeks, driven by the economic fears spawned by the US trade tariffs and the warmer than average start to spring, which has reduced overall demand for gas heating, Cornwall Insight found.
The new price cap, which reflects the average annual dual-fuel bill for about 29m households, will take effect from July until the end of September. Cornwall expects there to be a “very slight fall” in the price cap in October, followed by another decline in January 2026.
However, Dr Craig Lowery, a consultant at Cornwall, warned there was “unfortunately no guarantee” that the fall in gas prices would continue and that there was “always the risk of the market rebounding”.
“The only real way to protect households from this constant cycle of instability and insecurity is to reduce our dependence on international wholesale markets. That means continuing to focus on growing low-carbon energy generation here in Great Britain and building a more secure, more sustainable energy future,” he said.
Paul Morozzo, a senior campaigner at Greenpeace UK, said the drop in energy prices would “provide a massive relief to bill payers but bills will still be a whopping 30% higher than they were before Russia invaded Ukraine”.
“This wild volatility is a clear demonstration that we’re still strapped to the fossil fuel rollercoaster. And we’ll continue riding it until we stop gas from setting the price we pay for electricity, so that renewable energy – which is vastly cheaper than gas – can finally bring down bills for good,” he said.
