UK energy bills are rising again this winter. The number that matters more is attached to a Bank of England warning letter.

Ofgem's price cap rises 4% from October 1, to £1,723 for a typical household, about £60 a year or £5 a month more. Gas costs are driving nearly all of it, up 8%, while a government move to strip VAT off electricity bills is limiting the damage by roughly £45 a year. (Irish News, Ofgem)

The cause sits outside the UK entirely. The Middle East conflict has kept wholesale gas prices volatile since it began, and UK inflation rose to 3.1% in August, enough above target to trigger a formal letter exchange between the Bank of England's Governor and the Chancellor, a mechanism that only activates when inflation overshoots by more than a full percentage point. Roughly 0.7 of that 1.1-point overshoot came directly from energy prices, mostly motor fuels. (Bank of England, September MPC minutes) The Bank held its base rate at 3.75% rather than raise it, but only by a 6-3 vote, and it's now warning inflation could pass 4% in early 2027 if energy prices stay elevated. (Cyprus Mail)

This quarter's rise is small partly because of the VAT offset, about £60 a year. That part is easy to absorb.

What's harder to absorb is not knowing yet whether October was the small shock or the first of several. January's price cap will say which.