UK energy bills to rise 4% in October, Ofgem says

UK household energy bills are set to rise in October after regulator Ofgem said the price cap on gas and electricity would increase by 4%.

Ofgem said the change would add about £5, or $7, per month to the average bill. A typical annual bill for gas and electricity will rise to about £1,723, the regulator said.

Ofgem cited the ongoing conflict in the Middle East as a reason for the increase, saying the months-long closure of the Strait of Hormuz had crimped gas supplies and kept wholesale prices high.

Prime Minister Andy Burnham has announced that value-added tax will be removed from electricity bills from October to coincide with the expected rise in the cap. Ofgem said households may not see the full impact of the VAT reduction because gas wholesale prices remain high due to global events.

Higher energy costs have raised concern about inflation. Britain's annual inflation rate rose to 2.9% in July, driven largely by a 13% increase in the energy price cap that took effect last month.