The Ofgem energy price cap will rise to £1,723 per year from October, up from the current £1,663, as falling oil prices and hopes of a US-Iran deal steadied the FTSE 100 on Wednesday after an early slide dragged by BP and Shell.
Ofgem Energy Price Cap Hits £1,723 from October
The regulator confirmed the October–December quarter cap will increase by £60 per year, or £5 per month, for a typical household paying by direct debit. Ofgem publicised the move as a 4% rise, though its director general for markets, Neil Kenward, confirmed the precise figure is 3.6%, according to BBC News.
Prepayment meter customers face a separate cap of £1,678 for the same quarter, covering roughly four million households, according to Ofgem’s unit rates page.
Approximately 35% of households, around 11 million, are on fixed tariffs and will not be affected by the rise. Ofgem attributed the increase primarily to higher wholesale gas costs, which it said have been pushed up by the war between the US, Israel and Iran.
Economists said last quarter’s price cap rise contributed to higher UK inflation. The new increase adds fresh pressure on efforts to ease the cost-of-living burden.
Dan Coatsworth, AJ Bell’s head of markets, said: ‘Despite the pressure lower oil prices put on the shares of index heavyweights BP and Shell, the FTSE 100 managed to make some progress [on Tuesday]. It was supported by gains in the retail, aviation and housebuilding sectors.’
He added: ‘These areas have typically been beneficiaries when hopes of a resolution to the Iran conflict emerge, given the implications for inflation and borrowing costs if shipping routes through the Strait of Hormuz are unblocked.’
Brent crude fell by more than 2% on Wednesday to $86 per barrel, extending the week’s losses. Pakistan’s army chief said on Tuesday night that significant progress was being made towards a US-Iran peace deal. Reports that Iran and Oman are nearing a deal to secure an ‘interim’ reopening of the Strait of Hormuz added to the softer tone in crude markets.
Canada Escalates Trade War with Retaliatory Tariffs
Canada’s Finance Minister François-Philippe Champagne on Wednesday announced a package of retaliatory tariffs targeting C$27.6 billion worth of US goods, effective 12:01 a.m. on 8 September 2026, according to Reuters. The C$27.6 billion figure corresponds to approximately $20 billion in US dollar terms.
Canada’s Department of Finance confirmed the countermeasures match dollar for dollar the 50% tariff the US imposed on C$27.6 billion of Canadian goods, which took effect on 22 August 2026.
The retaliatory measures cover more than 700 US goods, with counter-tariff rates ranging from 15% to 50%, according to CNBC. Targeted products include dairy, seafood, appliances, wood and paper products, and clothing. The most substantial measure is a 50% tariff on American steel and aluminium, double the previous rate.
Canada also unveiled a separate C$7.5 billion support package to assist businesses and workers affected by US tariffs.
The timing matters: the September 8 effective date gives both sides roughly two weeks to resume talks before the next round of measures bites.
