Home Energy Prices:

British households suffered a fresh blow to their strained finances yesterday as British Gas said that it was lifting the price of a key energy tariff by up to 15 per cent, prompting fears of a wider increase in gas and electricity bills in the new year. Britain’s largest energy supplier said that it was putting prices up on its Market Tracker price plan, which follows prices in the wholesale energy market, by 13 per cent for gas and 15 per cent for electricity, with immediate effect. The majority of the ten million gas and six million electricity customers of Centrica, the British Gas owner, who are on standard or online tariffs will not be affected, but industry experts say that the news is a harbinger of price rises to come in 2008. Mark Todd, a director at energy-helpline.com, described it was “an ominous warning sign”. Tim Wolfenden, the head of home services at uSwitch,com, said: “The fact that prices are higher now for this product suggests other suppliers won’t be able to hold back from further rises next year.” The announcement was made on the eve of a pivotal meeting of the Bank of England’s Monetary Policy Committee and comes as a fresh blow to consumers already struggling with rising prices for food and petrol, as well as deteriorating conditions in the credit and housing markets. British Gas’s Market Tracker product was launched in April and gives households the option of linking the prices that they pay for gas and electricity closely to the rises and falls in the wholesale market. Another provider, nPower, which operates a similar tracker tariff, hinted yesterday hinted that price rises could be on the way for its customers. “We are constantly reviewing our prices and will look at them again in the new year,” a spokesman said. The decision by British Gas to raise the price of its tracker tariffs comes a month after the group reduced prices on some other tariffs.