The energy regulator confirmed that energy bills will fall by £129 in July. 

Ofgem said the price cap will fall to £1,720 over the summer. A 7 per cent - or £129 - fall from the current price cap, which is set at £1,849 for the average household. 

It means households will pay 25.73p/kWh for electricity and 6.33p/kWh for gas, with standing charges of 51.37p and 29.82p, respectively.

The price cap is set for a theoretical average household using gas and electricity and actual bills will depend on individual usage. 

The price cap is now at a similar level to October 2024's price cap, which was £1,717, and this is the first drop since 2024. However, bills remain far more expensive than before the energy crisis price spike hit.

But it is possible for households to get fixed energy deals that beat the price cap.  

Energy consultancy Cornwall Insight accurately predicted the price cap figure earlier this week. 

However, it warned that while falling prices are good in the short term, households are still struggling with higher bills and the volatile wholesale market behind them. 

Dr Craig Lowrey, principal consultant at Cornwall Insight said: 'While it’s important to celebrate the small wins, the energy market remains unpredictable. We know recent declines in wholesale prices have helped bring the cap down, but global events - from geopolitical negotiations to shifts in trade and weather - can quickly reverse that trend. 

'Plus, even with the cap coming down, bills are still higher than what we used to consider ‘normal’, so support is still very much needed. The outlook may be improving, but we’re not out of the woods yet, and energy affordability must remain a priority

Further ahead, Cornwall Insight expects another drop in October to £1,727 and then again in January 2026. Octopus is 'fairly confident' the October price cap will fall to £1,662, while British Gas says it could be around £1,715.

These predictions are not set in stone but they can help you make a decision on what kind of energy deal to pick.

Is it a good time to fix your energy bill?

Many households have already moved to a fixed energy deal to save money on their monthly bill.

Suppliers are still offering competitive deals that undercut the current price cap, but with prices set to fall later this year, are they worth it?

Richard Neudegg, director of regulation at Uswitch says: 'The savings from fixed deals are far bigger than this drop. The cheapest fixed deal could save the average household £203 a year compared with the July price cap.

'Millions of homes are already paying cheaper rates than the new July cap, after switching to a fixed deal.

The best fixed energy deal on the market is Outfox the Market's 12-month fixed deal, with an average annual bill of £1,517. It represents a £332 saving on the April price cap, and if Cornwall Insight's prediction is correct, would still save households £203.

Its 18 month deal at £1,520, and 24 month deal at £1,525, also offer savings on both the April and July price caps.