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British Gas owner Centrica reports 2% operating profit rise

Centrica owns British Gas. Credit: PA

British Gas owner Centrica has fuelled further controversy after reporting profit rises.

It reported a two per cent rise in UK and Ireland operating profits to £906 million, helping group operating profits jump four per cent to £1.5 billion.

The company is expected to face fresh calls to address tariffs for businesses and domestic consumers.

Centrica's British Gas residential energy supply arm, which only covers UK homes, reported an 11% drop in operating profits to £553 million, compared with £623 million in 2015, but said the reduction was due in part to a customer exodus.

More than 409,000 UK home customers left the business in 2016, marking a 3% fall to 14.25 million.

British Gas announced it was extending a price freeze on its standard energy tariff until August, "despite increases in external costs", but customers are expecting prices to soar later this year, following the Brexit-induced collapse of the pound and rising wholesale energy prices.

The industry has faced increasing pressure to treat loyal customers fairly and has been criticised for being slow to pass on falls in wholesale gas prices, with consumer groups hitting out at the size and timing of cuts.

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Energy price row reignited as British Gas profits double

The row about high energy prices has been ignited after British Gas announced its profits had doubled in the first half of this year.

A report found Brits were paying 5% more for their energy bills that they should. Credit: PA

It comes as its parent group Centrica said it would be axing 4,000 jobs, not all of which will be in the UK.

The cut follows a strategic review aimed at delivering savings of £750 million a year by 2020.

British Gas profits were £528 million for the first half of the year, more than it made in the whole of 2014, even though it recently cut prices by 5%.

Which? executive director Richard Lloyd said: "While it's good to see the new commitment from Centrica to focus on serving customers, with British Gas profits high and wholesale prices low, customers will no doubt wonder why cuts to their bills haven't gone further, and haven't included electricity.

"Following the Competition and Markets Authority's blistering assessment of this sector, we expect big suppliers to pass on falling costs to their customers quickly and fairly."

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