British Gas freezing its energy prices until August

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British Gas, one of UK’s big six energy suppliers, has said it is freezing gas and electricity prices until August.

British Gas said it was able to hold tariffs in the face of higher wholesale prices by reducing its internal costs.

However, Scottish Power has said it is raising its dual fuel prices by an average of 7.8% from 31 March.

Scottish Power blamed smart meters and low carbon energy costs for its rise. Earlier this month, Npower announced it was raising its prices.

‘Significant rises’

Scottish Power said standard electricity prices would increase by an average of 10.8% and gas prices by an average of 4.7%. It said that about one third of its customers – 1.1 million people – would be affected by the change.

“This price change follows months of cost increases that have already led to significant rises in fixed price products that now unfortunately have to be reflected in standard prices,” said Colin McNeill, UK retail director for Scottish Power.


Analysis: Kevin Peachey, personal finance reporter

This decision will be a relief to five million British Gas customers – but that may only be temporary.

With rumours swirling of a British Gas price rise, the company has now effectively said no increase will occur for five spring and summer months (as any rise requires one month’s notice).

Yet with other suppliers changing their tariffs, there will be a chorus among government, the regulator and others urging householders to switch.

Is the message getting through after years of repetition? A recent report by the competition authorities found that a third of the 7,000 people it asked did not realise that switching was an option.


When Npower announced its price rises, energy regulator Ofgem told it to “justify” to its customers why it was introducing one of the largest increases for years.

Npower said it would raise standard tariff electricity prices by 15% from 16 March, and gas prices by 4.8%, increasing an average bill by 9.8%, or £109.

British Gas owner Centrica said the freeze had been made possible “despite increases in external costs”.

In a statement, the company said: “We are engaging all of our customers on our standard tariff with a range of new offers. It is important to us to ensure that customers continue to make an active, informed choice over their energy.”

Inflation

EDF Energy cut its gas prices by 5.2% in January, but its electricity prices are due to rise by 8.4% on 1 March.

After both changes, EDF says its dual fuel customers will pay 1.2% more a year, taking average energy costs to £1,082.

Energy price rises are likely to fuel inflation concerns.

Rising air fares and food prices helped to push up UK inflation to 1.6% in December, its highest rate since July 2014.

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