On 27 May 2026, Ofgem announced that the domestic energy price cap would rise by 13% from 1 July, taking the typical household bill from £1,641 to £1,862 a year. It’s the kind of headline that lands on every front page — and the kind that business owners often assume doesn’t apply to them.
They’re right, technically. The Ofgem price cap only governs default tariffs for domestic customers on standard variable rates. Business energy contracts sit outside it entirely, priced and negotiated separately with suppliers. But the forces behind the July rise are exactly the forces shaping business energy pricing too, and it’s worth understanding why.
Why the cap rose
Ofgem was clear about the cause: higher wholesale gas prices, driven by the ongoing conflict in the Middle East, with wholesale prices up 28% over the three months to May. Electricity is rising by less than gas — around 5% versus 24% — because more of Great Britain’s electricity now comes from renewable generation, reducing (but not eliminating) reliance on gas-fired power.
That wholesale volatility isn’t filtered out for business customers. If anything, businesses feel it faster: most business energy is bought on fixed-term contracts negotiated directly with a supplier, which means the price you lock in depends heavily on wholesale conditions at the moment you sign — not a quarterly regulatory cap.
What this means if your contract is up for renewal
If your business energy contract is coming up for renewal in the next few months, this is worth paying attention to for two reasons.
First, suppliers price new business contracts using current and forward wholesale rates. A renewal quote obtained during a period of elevated wholesale prices can look very different from one obtained a few months earlier or later — which is exactly why we’d always encourage getting a market comparison close to your renewal date, not relying on a quote from months ago.
Second, many businesses are still on rates set when they last renewed — sometimes years ago — and haven’t checked whether that rate reflects current market conditions, in either direction. Loyalty rarely earns a better deal in the energy market; a fresh comparison usually does.
What to actually do about it
You don’t need to become a wholesale energy analyst to protect your business from this kind of volatility. A few practical steps:
Check your contract end date now, not the week it expires — most suppliers require notice before renewal, and leaving it late limits your options.
Ask what you’re actually paying per unit, not just your monthly bill total, so you can compare it properly against the market.
Get an independent comparison before you renew with your existing supplier by default. It costs nothing to check, and it’s the only way to know whether “business as usual” is still the cheaper option.
This is the audit we run for clients as part of our gas and electricity service — a free, impartial comparison against the market, with no obligation to switch and no fee unless we find you a saving.
Sources: Ofgem, “Energy price cap will rise by 13% from July”, 27 May 2026.