What is the new January price cap forecast?
The January price cap is now forecast to rise by around 16%, not the 9% we reported last month. Cornwall Insight, the energy consultancy, puts a typical dual fuel bill at around £1,999 a year from January 2027, up from £1,723 in October. That’s roughly £276 more for a household on typical usage, paying by direct debit.
It would be the biggest rise since January 2023, according to Cornwall Insight.
Energy UK, the supplier trade body, made the same warning on 3 October, but with a bigger number. It said projections for January point to an increase of around £350, taking a typical annual bill to around £2,100, and described it as the biggest rise in four years. So two credible forecasters are around £100 a year apart. That gap is worth holding on to, because it is the honest measure of how uncertain this still is.
It is still a forecast, from either source. Ofgem hasn’t confirmed the January price cap, and that announcement is expected in late November. But the numbers have moved a long way in a few weeks, so it’s worth a proper look now.
Why has the January price cap forecast jumped?
Gas, mostly. Cornwall Insight blames the continuing conflict in the Middle East, which is disrupting gas supplies to the UK and the rest of the world. European gas storage was around 65% full at the start of September, its lowest September level in 15 years and well below its long term average.
Ofgem builds the wholesale part of the cap from prices over a fixed observation window. Cornwall Insight says the window for the January price cap is now nearly halfway through, and the price rises seen in September are already locked in. Its words: that makes a January increase “all but certain”. What’s still open is how big it ends up.
Wholesale prices hit their highest level in four years in early September before falling back. Even if the conflict ended tomorrow, Cornwall Insight says the supply disruption would take months to correct, and the higher prices already in the window would still count towards the January price cap. We covered the wholesale side when gas prices hit a four year high.
January price cap forecast at a glance
Here is the forecast next to October’s confirmed cap. All figures are for a typical dual fuel household paying by direct debit, on Ofgem’s typical use of 2,500 kWh of electricity and 9,500 kWh of gas a year.
| October 2026 (confirmed) | January 2027 (forecast) | |
|---|---|---|
| Typical annual dual fuel bill | £1,723 | around £1,999 (Cornwall Insight), around £2,100 (Energy UK) |
| Change | up 4% | up around 16%, about £276 (Cornwall Insight); about £350 (Energy UK) |
| Electricity and gas split | not shown here | around £959 electricity, around £1,040 gas (Cornwall Insight) |
| Confirmed by Ofgem | Yes | Expected late November 2026 |
The cap limits the unit rates and standing charges you pay on a standard variable tariff. It doesn’t limit your total bill, so if you use more than the typical amounts, you’ll pay more than the headline figure. We broke down October’s confirmed rise if you want the detail on how the current cap works.
Should you fix before the January price cap rises?
It depends on your household, and nobody can promise that a fix will work out cheaper than the cap. A fixed deal keeps your unit rates the same until the deal ends, so if prices keep climbing it can protect you. If prices fall instead, you could end up paying more than someone who stayed put.
Most fixed deals also carry an exit fee if you leave early, so read that line before you commit. Compare any fixed deal against the current cap rate, not last winter’s bill, so you’re comparing like with like.
A fix suits some people less than others. If you’re moving home soon, already part way through a fix, or in debt to your supplier, sort that out first. The January price cap shouldn’t be what forces your hand.
Three checks to make before the January price cap lands
Your supplier is quietly counting on you doing nothing. A few minutes now beats a scramble in late November, when the real January price cap figure appears and everyone checks on the same afternoon. Roo has already started on the comparison, so you may as well let him finish.
Key takeaways
- Compare fixed deals against today’s cap rate, not last year’s bill.
- Check your supplier’s exit fee, and whether it’s waived if you move to another of their deals.
- Take a meter reading just before any new rate starts, so you’re not billed the new price for energy you used on the old one.
None of this is about panic. Cornwall Insight’s own comment is that the volatility has no clear end yet, and that the effects of the conflict could last for many more months. A calm decision now is better than a rushed one later.
Frequently asked questions about the January price cap
- Is the January price cap definitely rising 16%?
- No. That is Cornwall Insight’s forecast, not a confirmed figure, and Energy UK’s projection is higher again. Ofgem sets the real January price cap, and the announcement is expected in late November.
- How much more would I pay?
- Cornwall Insight’s forecast works out at around £276 a year more than October’s cap for a typical household. Energy UK’s projection is around £350. If you use more than 2,500 kWh of electricity and 9,500 kWh of gas a year, expect more than either figure.
- Why has the forecast changed from 9% to 16%?
- Gas prices rose through September, and Cornwall Insight’s updated forecast reflects that. It also says the September rises are already locked into the January price cap observation window.
- Does the price cap apply if I’m on a fixed tariff?
- No. The cap only limits what you pay on a standard variable tariff. A fixed deal keeps your rates the same until it ends, whatever the January price cap does.
- Will the Budget help with the January price cap?
- Possibly, but nothing has been announced. Cornwall Insight says further household support beyond July’s VAT move is possible, and that the Government will have to think carefully about the type and level of help.
Sources
- Cornwall Insight, 16% price cap rise forecast in January, 30 September 2026. The £1,999 forecast, the £276 increase, the £959 and £1,040 fuel split, the biggest rise since January 2023 comparison, the gas storage figures and the observation window.
- Energy UK, warning on bills ahead of January, 3 October 2026. The around £350 increase, the around £2,100 typical bill and the biggest rise in four years description.
- Energy UK, response to the October price cap. The £1,723 cap from 1 October.
- Ofgem, energy price cap. How the cap is set and confirmed.
Checked 12 October 2026.
