the maximum amount a supplier can charge for a unit of energy and standing charge, set by the regulator Ofgem every three months

Electricity is sold at a price per day (the standing charge), even if you use no electricity you pay this, plus whatever you use in kWh. For example: £0.55 per day standing charge, plus whatever you use at £0.25 per kWh.

You can get a fixed contract, meaning you know exactly what you're paying for the next 6-12 months. The standing charge and unit rate are agreed and don't change. However, suppliers forecast what the prices will be in that time and set their prices accordingly so they should still make a profit.

Or, you can be on the variable rate. This price fluctuates based upon the cost of energy at the time, and can be very volatile depending upon world events at the time.

The domestic cap is a limit that the state imposes upon the variable rate, supposedly to dampen volatility, prevent price gouging, and ensure energy remains affordable to consumers.

The cap is reviewed every 3 months and is almost guaranteed to go up every 3 months.