UK energy market regulator Ofgem said today it would review a price cap on domestic energy prices quarterly rather than twice a year, aiming at reducing risk of supplier failures and cost increases for consumers.

British wholesale gas prices hit record highs after Russia's February 24 invasion of Ukraine and have remained elevated despite falling back from their peak level.

Britain receives about 4% of its gas from Russia, but lower overall Russian supply to Europe means competition for gas is intense, pushing prices higher.

"Today's change will go some way to provide the stability needed in the energy market, reducing the risk of further large-scale supplier failures which cause huge disruption and push up costs for consumers," Ofgem said.

"It is not in anyone's interests for more suppliers to fail and exit the market," it added.

The cap, which has been in place since January 2019, reflects the cost of energy supply by setting a maximum that suppliers can charge per unit of energy and limits the level of profits an energy supplier can make to 1.9%.

Price caps will be updated more frequently so prices charged to bill payers better reflect current gas and electricity costs, allowing suppliers to better manage risks, Ofgem said.

It added that paying a rate that is up to six months out of date in the current volatile market was no longer sustainable and could mean either consumers paying too much for months if wholesale prices have fallen or suppliers left unable to supply gas with the money they are allowed to charge if prices have risen.

"The trade-offs we need to make on behalf of consumers are extremely difficult and there are simply no easy answers right now," said Jonathan Brearley, Ofgem's chief executive.

Around 30 UK suppliers, mostly of small to medium size, have failed since last year.

Ofgem warned that customers faced a challenging winter ahead. As a result of climbing wholesale prices, the cap will have to increase and Ofgem will publish the next price cap level at the end of August.

Analysts said the average annual UK household dual-fuel bill - covering both gas and electricity - will rise by around 70% in October to more than £3,359 and remain high until at least 2024.

The End Fuel Poverty Coalition campaign group warned that millions of people will face a two-phase cost-of-living crisis this winter in October and then in January, forcing more people into fuel poverty in the middle of winter.

Last May, the government set out a £15 billion package of support for houesholds, saying that each home would receive a £400 energy bill credit for when the price cap rises in October, but that was when the forecast price rise was much lower.

Pressure will be on a new prime minister to announce new support measures for households.