Energy Price Cap 7 per cent drop predicted for July 2025
But, despite the decrease, affordability remains a concern - typical annual energy bills are still expected to be around £1,680 — around 50% higher than pre-crisis levels.
More customers are switching to fixed energy tariffs, which are currently often cheaper than the Price Cap rate.
Matt Turner-Tait, Senior Manager at energy experts BFY Group, says: 'We are forecasting that the July 2025 energy Price Cap will fall by around 7%, bringing it down to approximately £1,715. This would put typical annual energy bills at around £1,680 - a reduction, but still significantly above pre-crisis levels."
This is a fall of about £134 from the current level of £1,849, set in April, and reflects recent declines in wholesale gas and electricity prices.
It may provide some short-term relief for households on standard variable tariffs. While energy prices typically dip in summer due to reduced demand, market signals indicate that prices could stay at current levels through the winter as well, challenging expectations of the usual seasonal rebound.
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"Adjustments to the amount suppliers are allowed to recover for operating costs could reduce bills by up to £15 per year," says Matt. "But these savings could be offset by the rising bad debt among suppliers and other pressures, such as volatile wholesale markets, the rising costs of decarbonisation, inflation-driven operational expenses and regulatory compliance.
"More energy customers have been switching to fixed tariffs, which are always cheaper than the Price Cap, and are currently significantly so - by around £250 to £300 for a typical customer.
"While the gap between fixed deals and the capped rate may narrow as the Price Cap falls, fixed tariffs are still expected to offer savings in the near term."
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