# What the October 2026 Energy Price Cap Rise Means for Your Business > Ofgem's household energy price cap is rising 4% from October 2026. Here's why business owners should still pay attention, and what to check. Last updated: 2026-09-02 *Blog | by Rob Young | August 2026* # What the October 2026 Energy Price Cap Rise Means for Your Business ### Rob Young Ofgem has confirmed that the household energy price cap will rise 4% from 1 October 2026, taking the typical dual-fuel bill to £1,723 a year. That cap only applies to domestic tariffs, so it doesn't set your business energy price directly, but the same forces pushing it up are the forces your business energy supplier is pricing against too. Here's what's actually happening, and what's worth doing about it before the winter renewal season gets busy. ## Why is the price cap going up, and does it actually apply to my business? The rise is driven by wholesale gas prices, which Ofgem says have increased 11% over the last three months, largely because of volatility linked to the conflict in the Middle East. Gas bills under the cap are rising 8%, while electricity has stayed close to flat, helped by the government's removal of VAT on domestic electricity, so the two fuels are moving quite differently even though both sit inside the same headline 4% figure. The price cap itself is a protection for the roughly 22 million households on default domestic tariffs. It has never applied to business energy contracts, which are priced individually by suppliers and were not protected even during the 2022 energy crisis peak of around £2,500 a year on the domestic cap. What matters for a business owner isn't the cap number itself, it's the wholesale market that sits behind it, because that's the same market your supplier is quoting from when your contract comes up for renewal. ## What does this actually mean for a business energy contract? If your business is on a fixed-rate contract that isn't due for renewal for a while, this changes very little for you right now, beyond being a signal of the direction of travel. If your contract is coming up for renewal in the next few months, it's a different story: suppliers pricing new business contracts will be working off wholesale prices that have already moved up, so a like-for-like renewal quote is unlikely to be cheaper than your current deal, and could be noticeably more expensive if your existing rate was fixed some time ago. Businesses on variable or out-of-contract rates are the most exposed, since those rates move with the market on a rolling basis rather than being locked in. If that's your situation, it's worth actively shopping for a fixed deal now rather than waiting to see if prices ease off, given the direction the market has been moving in over the last few months. ## Should I fix my business energy contract now, or wait? There's no universal right answer here, because it depends on your appetite for risk and how exposed your margins already are to cost increases elsewhere. What is worth doing, regardless of which way you lean, is getting a genuine comparison quote before your existing contract lapses rather than after, since many suppliers move you onto a significantly more expensive deemed or out-of-contract rate automatically if a new contract isn't agreed in time. It's also worth checking your renewal date now if you're not confident you know it off the top of your head. A surprising number of businesses only find out their contract has rolled onto a deemed rate when the higher bill actually arrives, which is a considerably worse time to be shopping around than a few weeks before the renewal date. ## How should this feed into my budgeting and cashflow forecast? Energy is rarely the biggest line in a small business budget, but it's one of the more volatile ones, and volatility is exactly what makes a forecast unreliable if it isn't accounted for. If energy is a meaningful part of your cost base, whether that's a shop, a workshop, an office, or anything with significant heating, cooling or equipment load, it's worth building a deliberately cautious energy assumption into your autumn and winter cashflow forecast rather than simply rolling forward last year's number. This is also a good moment to revisit your forecast more broadly rather than adjusting one line in isolation. Energy costs, wage costs and financing costs all tend to move around the same time of year, and a forecast that's stress-tested against a few different scenarios, rather than one fixed set of assumptions, holds up much better when more than one of those things moves at once. ## A quick checklist before winter 1. Check your business energy contract renewal or end date, and don't assume it's further away than it is. 2. Get at least one comparison quote before your current contract lapses, especially if you're on a variable or out-of-contract rate. 3. Build a cautious, not optimistic, energy cost assumption into your autumn and winter cashflow forecast. 4. Review other volatile cost lines (wages, financing) alongside energy rather than in isolation. 5. If you're unsure what 'good' looks like for your sector, ask your accountant or a broker to sanity-check a quote before you sign. ## Frequently asked questions ## Does the Ofgem price cap protect my business energy bill? No. The energy price cap only applies to domestic household tariffs. Business energy contracts are priced individually by suppliers and have never been protected by the cap. ## Why are business energy quotes going up if the cap rise is only 4%? The 4% figure is the change in the household cap specifically. Business quotes are priced from the same underlying wholesale gas market, which Ofgem says has risen 11% over the last three months, so a renewal quote can move by a different amount than the household headline figure. ## What happens if I don't renew my business energy contract in time? Most suppliers will automatically move you onto a deemed or out-of-contract rate, which is usually significantly more expensive than a negotiated fixed contract. It's worth acting before your existing contract lapses rather than after. ## Need help with your numbers? If you'd like a second pair of eyes on your cashflow forecast before winter, or want to talk through how a business energy renewal might affect your numbers, the LYA team is happy to help. Email support.london@loveyouraccountants.com or call 01372 374143, or [book a free consultation](https://loveyouraccountants.com/contact) to get started. ![](https://loveyouraccountants.com/asset/2401/175-175-def/author-rob_young.png) **Author** ###### **Rob Young** Rob is Managing Director at LYA, supporting ambitious businesses to scale with confidence through clear planning and proactive financial insight. [Read more](https://loveyouraccountants.com/team-bio/rob-young) --- ### Related Blogs - [What the October 2026 Energy Price Cap Rise Means for Your Business](https://loveyouraccountants.com/knowledge/energy-price-cap-rise-business-2026) — Ofgem's household energy price cap is rising 4% from October 2026. Here's why business owners should still pay attention, and what to check. - [What to Do If HMRC Has Automatically Signed You Up for Making Tax Digital](https://loveyouraccountants.com/knowledge/what-to-do-if-hmrc-has-automatically-signed-you-up-for-making-tax-digital) - [Companies House Identity Verification: 2026 Director Guide](https://loveyouraccountants.com/knowledge/companies-house-identity-verification) — Understand Companies House identity verification for directors and PSCs, including personal codes, confirmation statements and separate filing deadlines. - [Can ChatGPT Do My Bookkeeping?](https://loveyouraccountants.com/knowledge/can-chatgpt-do-my-bookkeeping) — ChatGPT really do your bookkeeping? Discover what AI and can't do, how it works alongside Xero, and why the future isn't AI replacing accountants—it's accountants using AI to deliver better advice.