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By Staff Writer with Agencies | February 25, 2025
Millions of UK households will see a rise in their energy bills this spring as Ofgem increases the energy price cap for a third consecutive quarter. From April 1, household energy bills for those on standard variable tariffs in England, Scotland, and Wales will rise by 6.4%, pushing the average annual bill from £1,738 to £1,849.
The increase, attributed to rising wholesale prices, equates to an additional £111 per year for an average household, or £9.25 per month. Ofgem has suggested that bills may fall in the summer, but consumer groups and fuel poverty campaigners warn that the price hike will place additional strain on vulnerable households.
UK Among Most Expensive for Household Electricity
According to the latest Household Energy Price Index (Hepi), London ranks among the most expensive cities in Europe for household electricity. The report highlights that Britain’s reliance on gas to generate electricity is a key factor in the high prices compared to other European nations.
The Hepi report, which tracks energy prices across European capitals, found that as of January 3, 2025, London’s household electricity prices stood at €36.75 per kilowatt hour (kWh), making it the fourth most expensive city in Europe. The highest electricity prices were recorded in:
- Berlin (€40.42/kWh)
- Brussels (€38.52/kWh)
- Copenhagen (€37.47/kWh)
- London (€36.75/kWh)
- Bern (€36.41/kWh)
By contrast, the lowest electricity prices in Europe were seen in:
- Budapest (€9.07/kWh)
- Kyiv (€9.76/kWh)
- Belgrade (€10.50/kWh)
Gas Prices: A Mixed Picture for the UK
While the UK ranks among the highest for electricity prices, London fares better when it comes to gas prices, placing 18th out of 27 European capitals. London’s gas price, including taxes, stands at €8.81 per kWh, significantly lower than Stockholm’s €33.27 per kWh, which is the highest in Europe and three times the average gas price across the continent.
The cheapest gas prices were recorded in:
- Kyiv (€1.77/kWh)
- Budapest (€2.49/kWh)
- Belgrade (€3.21/kWh)
Why Are Energy Prices Rising?
The surge in energy costs across Europe has been largely driven by geopolitical and climatic factors. The Hepi report attributes the January price hike to a combination of cold weather and disruptions in gas supplies due to the Russia-Ukraine war.
The decision to halt gas flows through Ukraine at the start of 2025 resulted in a significant reduction in European gas storage levels, which drove up wholesale prices. Given the UK’s heavy dependence on liquefied natural gas (LNG) imports via Europe, international market fluctuations have directly impacted domestic prices.
Ofgem has cited global wholesale price increases as the primary driver of rising household bills. With the UK importing a significant portion of its energy, fluctuations in the international market continue to play a crucial role in determining prices for British consumers.
Government Response
Energy Secretary Ed Miliband has emphasized the need for long-term solutions to address the UK’s energy security and high costs. Speaking on Tuesday, he reaffirmed the government’s commitment to reducing reliance on fossil fuels through investment in renewable energy sources.
“The only way we can have the energy security that British people deserve is by getting off fossil fuels that are controlled by petro-states and dictators,” Miliband stated. “Our mission for clean, homegrown power will help bring down bills and ensure long-term stability.”
Despite these pledges, consumer advocacy groups warn that more immediate relief is needed for struggling households. Many are calling for additional government intervention, such as targeted subsidies or expanded energy price support programs, to mitigate the impact of rising costs on low-income families.
Looking Ahead
While Ofgem has suggested that energy bills may decrease during the summer months, uncertainty remains. Factors such as global energy supply chains, geopolitical developments, and market trends will continue to influence future price fluctuations.
For now, UK households will need to brace for yet another increase in their energy bills, as the country remains one of the most expensive places in Europe for electricity and gas.