Experts fear 'floodgates open' on new wave of energy price rises

Energy experts believe “the floodgates have been opened” for a new round of price rises that will hit millions more UK households.

EDF Energy has today upped electricity prices by 2.7%, hitting about 1.3 million customers in the pocket.

The company said the rise would add about £16 a year to dual fuel households. Gas prices remain unchanged, it said.

As a result, typical dual-fuel customers will see their bill rise by 1.4%, or £16 a year, bringing the typical annual bill to £1,158 a year.

The move comes just two days after British Gas became the first of the so-called Big 6 energy providers to break ranks and increase tariffs.

MORE: British Gas increases dual fuel bills by 5.5% hitting 4 million customers

Stephen Murray, from price comparison website MoneySuperMarket, said: “Clearly, the price rise from British Gas earlier this week has opened the floodgates and we are now officially in price rise season.

“It is fair to say the forthcoming energy price cap, even though it is still months from being signed off and introduced, is looking like a key factor in this round of price rises.

“The big six suppliers know they have a short window to adjust prices upwards before the government starts to enforce pricing legislation.”

MORE: 5 million poorest households face 5.5% energy bills rise – after watchdog changes tariffs

Béatrice Bigois, EDF Energy managing director of customers, said: “We know that price rises are not welcome and we have worked to offset rising energy and policy charges by cutting our own costs.

“We will be writing to affected customers this month to encourage them to choose a fixed price tariff or to pay by direct debit to save on their bills.”

The company said that the price rise “reflected the increase in some of the fixed costs associated with supplying electricity”.

EDF raised electricity prices twice last year, putting them up by 8.4% in March and 9% in June.

Hannah Maundrell, editor in chief of money.co.uk, said: “With a rise from British Gas, and EDF following suit, the worry is that other energy providers will jump on the bandwagon and put up prices.

“Remember that the energy you use at home does the same job regardless of who your supplier is. You get the same outcome from each of them so make sure you are getting it for the best price.”

British Gas customers were hit with a 5.5% hike in dual fuel bills on Monday, hitting an estimated 4.1 million customers with a £60 a year rise for an average total annual bill of £1,161

The energy giant blamed the move on rising wholesale prices and policy costs.

MORE: New energy price cap will help 1 million households – are you eligible?

It pointed to the costs of the smart meter rollout and tackling carbon emissions – but did not mention specifically the possible price cap.

Theresa May wants energy customers who default on to often more expensive standard variable tariffs once their cheaper fixed-term, fixed tariff deals not to be hit too hard in the pocket.

She wants to see the industry impose a cap on SVTs – but the industry believes there are better ways at helping customers get a good deal, such as encouraging more switching to lock them in to longer term rates.