1. ITV Report

British Gas to raise electricity prices by 12.5%

  • Video report by ITV News Business Editor Joel Hills

British Gas has announced it will raising its electricity prices by 12.5% on September 15 in a move that will affect some 3.1 million customers.

The energy giant's price hike could mean an average dual fuel bill for a typical annual household tariff will rise by £76 to £1,120 - with those receiving a warm home discount promised a £76 credit to offset the tariff increase.

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According to British Gas, the decision to raise electricity prices "reflects the increasing costs of energy policy, and delivery to customers’ homes since 2014 ".

Details of the intended price hike also came as British Gas owner Centrica posted its half-year results which revealed that the company had lost 377,000 UK customer accounts since the start of the year and earnings from its consumer business had plunged by more than a quarter.

But Iain Conn, chief executive of Centrica, told ITV News they were putting prices up despite having lost customers because they were "losing money on selling electricity" as they were faced increasing cost pressure on transmission, distribution and costs associated with Government policy.

  • Video report by ITV News Political Correspondent Emily Morgan

The price hike prompted the government to warn of the effect it could have on those already in poor-value energy tariffs with the Department for Business, Energy and Industrial Strategy (BEIS) calling for "rapid progress" on regulator Ofgem's plans for reform.

A BEIS spokesman said: "Energy firms should treat all their customers fairly and we're concerned this price rise will hit many people already on poor-value tariffs."

The pricing move also flies in the face of the Government's pre-election pledge to introduce a price cap - a pledge that has since been watered down - and comes less than a month after regulator Ofgem said it was considering a new price cap on energy bills aimed at protecting vulnerable consumers.

  • What happened to an energy price cap? Analysis from ITV News Business Editor Joel Hills

British Gas' electricity price rise is just one of the latest continuing rising costs for consumers.

In April UK Energy giant EDF announced it will increase its dual fuel tariff by 7.2% from June, gas prices by 5.5% and electricity by 9%, affecting 1.5 million customers.

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