The UK’s household energy price cap will fall 7% when regulator Ofgem imposes its next quarterly rate, Cornwall Insight has predicted.
From July, a typical dual-fuel household will pay £1,720 a year, down from the current £1,849 price cap.
The cap, which limits what suppliers can charge per unit of gas and electricity, affects 22 million homes in England, Scotland, and Wales.
While lower than the current cap, the latest forecast represents a slight increase from the previous estimate from the energy consultancy, reflecting changes in wholesale energy prices and adjusted cost inputs.
For the subsequent cap that comes in from October, Cornwall Insights currently expect a "modest drop" in the price cap, followed by another dip in the cap that begins in January 2026.
The fall in the July price cap will bring "much-needed breathing space for households after a prolonged period of high energy costs" and is a "step in the right direction, but it should be taken in context", says Dr Craig Lowrey, principal consultant at Cornwall Insight.
"Prices are falling, but not by enough for the numerous households struggling under the weight of a cost-of-living crisis, and bills remain well above the levels seen at the start of the decade.
"As such, there remains a risk that energy will remain unaffordable for many."
He said the fall is a reminder of how volatile energy markets remain, with prices just as likely to fall as to bounce right back up due to geopolitical and economic factors.
"The government must continue to explore targeted support, including social tariffs, to ensure those most in need are not left behind as the market evolves," Lowrey said.
"While there is understandably a great deal of focus on widescale market reforms such as the introduction of zonal pricing, we must recognise that such changes will take years to come into effect.
"Discussions around ways to transform the energy market are important, but we must be careful to balance the transformational reforms and the urgent need to address the affordability crisis people are facing right now."
Continued growth of domestically produced renewable energy will improve energy security and help mitigate the effects of the global price shocks seen in recent years, Lowrey added.
"That progress needs to continue at pace, not just for the net-zero transition, but to help build a more stable and secure energy future for all."