Cornwall Insight has announced its final forecast for the July - September Q3 2025 Default Tariff Cap (price cap) following the closure of the observation window1 on 16 May.
New forecasts predict a typical dual fuel household2 will be paying £1,720 per annum in July. This would represent a fall of £129 and 7% from the current price cap which is set at £1,849 per year for a typical consumer.
The forecast has increased slightly since our last prediction, reflecting a combination of increases in the energy wholesale markets and updated assessments of several cost inputs including policy costs and network costs. We have also assumed that Ofgem will continue to apply its transitional c. £28 debt-related cost adjustment until at least the end of September, with a decision due from the regulator on an enduring solution ahead of the coming winter.
Looking ahead, we expect a modest drop in the price cap this October, followed by another in January 2026. However, a range of factors could shift these forecasts, including changing weather patterns, the relaxation of EU gas storage rules, ongoing debates around US tariffs and the continuing impact of the war in Ukraine.
Figure 1: Cornwall Insight’s Default Tariff Cap Forecast Based on Typical Domestic Consumption, and Per Unit Costs and Standing Charge Values (dual fuel, direct debit customer)
Source: Cornwall Insight’s Default Tariff Cap Forecast Service
Note: All figures are national average unless otherwise stated. All intermediate and final calculations are rounded to two decimal places. Totals may not add due to rounding.
Figure 2: Q3 2025 Default Tariff Cap Daily Forecast using Typical Domestic Consumption Values (dual fuel, direct debit customer)
Source: Cornwall Insight’s Default Tariff Cap Forecast Service
Dr Craig Lowrey, Principal Consultant at Cornwall Insight:
“The fall in the price cap is a welcome development and will bring much-needed breathing space for households after a prolonged period of high energy costs. It’s a step in the right direction, but it should be taken in context. Prices are falling, but not by enough for the numerous households struggling under the weight of a cost-of-living crisis, and bills remain well above the levels seen at the start of the decade. As such, there remains a risk that energy will remain unaffordable for many.
“The fall is also a clear reminder of just how volatile the energy market remains - if prices can go down, they can bounce back up, especially with the unsettled global economic and political landscape we are experiencing. This is not the moment for complacency. The government must continue to explore targeted support, including social tariffs, to ensure those most in need are not left behind as the market evolves.
“While there is understandably a great deal of focus on widescale market reforms such as the introduction of zonal pricing, we must recognise that such changes will take years to come into effect. Discussions around ways to transform the energy market are important, but we must be careful to balance the transformational reforms and the urgent need to address the affordability crisis people are facing right now.
“There are, however, reasons for optimism. The continued growth of domestically produced renewable energy is a positive step forward. It improves our energy security and helps mitigate the effects of the global price shocks we’ve seen in recent years. That progress needs to continue at pace, not just for the net zero transition, but to help build a more stable and secure energy future for all.”
Reference:
- The period of time Ofgem use to monitor the market and calculate the wholesale element of the cap.
- Ofgem’s Typical Domestic Consumption Values (TDCVs), are set at 2,700 kWh per annum for electricity, and 11,500 kWh per annum for gas.
Notes to Editors For more information, please contact: Verity Sinclair at v.sinclair@cornwall-insight.com To link to our website, please use: https://www.cornwall-insight.com/
Copyright disclaimer for commercial use of the press releases: The content of the press release, including but not limited to text, data, images, and graphics, is the sole property of Cornwall Insight and is protected by UK copyright law. Any redistribution or reproduction of part or all of the content in any form for commercial use is prohibited without the prior written consent of Cornwall Insight.
Media Use Exemption: The information included in this press release may be used by members of the media for news reporting purposes only. Any other commercial use of this information is prohibited without the prior written consent of Cornwall Insight. All non-media use is prohibited, including redistribution, reproduction, or modification of our content in any form for commercial purposes, and requires prior written consent. Please contact: enquiries@cornwall-insight.com
About the Cornwall Insight Group Cornwall Insight is a leading provider of research, analysis, consulting and training to businesses and stakeholders engaged in the Great British and Irish energy markets. To support our customers, we leverage a powerful combination of analytical capability, a detailed appreciation of regulation codes and policy frameworks, and a practical understanding of how markets function.
