On Friday, millions of Brits found themselves in fuel poverty due to a surge in household energy bills.

• The price cap for energy bills in Britain will increase by a record-breaking 54% starting from Friday, as determined by the country's energy regulator.
• From April 1, the number of English households in fuel poverty will double to 5 million, according to new research.
• Under the new price cap, many households could experience an increase of approximately £700 in their annual energy bills.

From April 1, the number of English households in fuel poverty will double to 5 million, according to new research, as Brits prepare for their energy bills to rise by hundreds of pounds.

As a result of higher prices taking effect on Friday, 2.5 million households in England will experience "fuel stress."

From Friday, energy bills in Britain will increase by 54% due to Ofgem's announcement in February of a record-breaking price cap hike.

The price cap set by Ofgem restricts the amount that households in the U.K. can be charged for energy utilities, and is reviewed biannually.

Under the new price cap, millions of households could see their energy bills increase by approximately £700 annually. Prior to the price cap, the average household's annual energy bill was between £1,277 ($1,676) and £1,370.

The Resolution Foundation's briefing on Friday revealed that low-income households would be disproportionately affected by the price rise, with the poorest 20% of households expected to spend 10% of their budget on energy bills, while the wealthiest 20% of households would only spend 4% of their budget on energy.

The increase in prices in the U.K. is due to the record high wholesale natural gas prices in Europe last year, resulting from various factors such as low inventories and Russia's tightening of its gas supply to the EU, even before the disputes over energy purchases that have emerged since Moscow's invasion of Ukraine.

The surge in wholesale gas prices has severely impacted the U.K., which heavily depends on gas as an energy source, exacerbating the country's current cost of living crisis.

In February, Rishi Sunak, the British Finance Minister, declared that all residential electricity customers would receive a £200 discount on their electricity bills starting in October, which would be repaid in £40 installments over five years.

Additionally, he declared that most households would receive a £150 refund on their council tax, which is a tax levied based on the worth of homes.

Potential impact of Ukraine war

The ongoing conflict in Ukraine and the resulting Western sanctions could lead to further instability in energy markets, potentially causing higher prices and supply disruptions.

European countries, including the U.K., could face gas and diesel rationing if Russia demands payments for gas in rubles and shuts off its supplies to the continent, according to energy analysts.

Putin threatened to halt gas purchases from "unfriendly" countries that refuse to pay in rubles by Friday, a move criticized by Germany as "political blackmail."

Despite a significant decrease in natural gas prices in Europe this month, costs remain elevated.

On Friday, the day-ahead price for natural gas on the U.K.'s National Balancing Point exchange was £2.95 per therm, a significant increase from the same price a year ago, which was £0.50 per therm.

The European day-ahead price on Friday was approximately 123 euros per megawatt-hour, an increase from 19.2 euros a year prior, according to Reuters.

Since Russia invaded Ukraine on Feb. 24, oil prices have been highly volatile.

The energy price cap in Britain is expected to be adjusted again in October, with the possibility of a further 40% increase if wholesale energy prices remain high. This could lead to inflation of 8.7% and a reduction in GDP growth, as predicted by the Office for Budget Responsibility in an update earlier this month.

The Resolution Foundation stated on Friday that a £500 increase in the price cap to £2,500 on 1 October, which is less than the OBR's forecast of a £830 increase, would mean that almost a third of all families in England would fall into fuel stress, with 7.5 million households affected in total.