An expert has issued new advice on heat pumps after a worrying prediction about inflation risks jeopardising the UK.

The alert comes on the back of a forecast suggesting household energy bills could increase by £332 annually from July. The concern is that recent sharp increases in wholesale prices are expected to affect Ofgem’s price cap, according to the latest projections.

Analysts at Cornwall Insight disclosed this week that predictions for the regulator’s price cap from July to September had rocketed to £1,973 annually for typical dual fuel households – an increase of £332 or 20% on April’s cap.

This represents a significant jump from its forecast just over two weeks ago, when it had anticipated a 10% rise from July, and comes as chancellor Rachel Reeves hopes to keep inflation and interest rates low as Sir Keir Starmer’s government strives to boost economic growth in the UK. The nightmare economic scenario in government now will be that the Iran conflict will badly damage those plans – and hit consumers hard.

Jess Ralston, Head of Energy at the Energy and Climate Intelligence Unit (ECIU), has now commented on Cornwall Insight’s most recent prediction for Ofgem’s July price cap, which could see a rise of over £300 from April’s cap, reports the Mirror.

She said: “Predictions of energy bills rising by hundreds of pounds will feel like deja vu to hard working families as yet another gas price crisis pushes up the cost of living. Many are still saddled with debt from the last gas crisis whilst Putin and the oil and gas companies stand to benefit.

“These wars and the global gas market are clearly beyond the UK’s control so the only way we have to permanently stabilise bills is to cut our use of gas and that means switching to electric heat pumps and renewables that squeeze gas power plants off the grid. The North Sea is in long term decline and more drilling won’t move the needle on prices we pay. Last year more renewables coming onto the grid pushed down the wholesale electricity prices by a third.”

The conflict in Iran and its impact on energy bills in the UK

Cornwall Insight are revising their forecasts every week as the US-Israel conflict with Iran intensifies and the energy market remains unstable. Cornwall stated that household energy bills over the summer appear set to be higher than it had predicted prior to the escalation of conflict in the Middle East, which has caused wholesale gas and oil prices to rise.

Even if wholesale prices swiftly revert to pre-conflict levels, some of the recent volatility will be factored into the next price cap, which covers July to September, according to Cornwall. However, the figure is likely to change and the magnitude of the increase to the next price cap will depend on how long gas prices remained high and how long the period of disruption persists.

Ofgem’s price cap is determined by average wholesale prices over a three-month period. A spokesperson for the Government’s Department for Energy Security and Net Zero described Cornwall’s forecasts as “highly speculative”, stating: “Using wholesale price fluctuations to predict what will happen in the next few months is not reliable.

“Tackling the affordability crisis is the Government’s number one priority. That is why we are acting to bring bills down now and for the long term.” The price most households pay for energy will decrease by 7% from 1 April, or £117 a year. However, gas prices have been increasing in recent weeks, and this could influence future electricity prices and the cost of heating homes.

On Thursday, UK natural gas prices reached a three-year peak after surging by approximately 25% during the day. Prices had slightly receded by Friday.