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Fresh blow as energy prices rise

Hard-pressed consumers have been dealt a fresh blow after Scottish Power unleashed what is expected to be a new wave of energy bill rises.

The company said gas tariffs will rise by an average of 19% from August 1, with electricity going up by 10% on the same date. The increases, which will impact on 2.4 million households, are expected to add £173 to the average annual dual fuel bill.

Other suppliers are certain to follow suit in the wake of a sustained rise in wholesale supply costs, which Scottish Power said had jumped 30% since it last increased gas and electricity bills in November.

Consumer Focus described the latest rise as a body blow for UK households and said it will further undermine public trust in energy companies.

Audrey Gallacher, the watchdog's head of energy, said: "Companies have been softening customers up for price rises for months but customers will be shocked at the scale of this rise."

Energy regulator Ofgem recently called for the industry to be overhauled after it found that the "big six" companies had put up prices more quickly than they reduced them when costs fell. It accused them of "failing to play it straight" with consumers and threatened to refer them to the Competition Commission if they failed to simplify prices.

Ofgem has also ordered energy companies to give its customers a minimum of 30 days' notice before putting bills up. A separate inquiry has been launched into Scottish Power's pricing plans.

The latest price rises will cause more misery for cash-strapped households, which are struggling as wages fail to keep pace with rising inflation. All of the big six companies hiked prices over the winter and the Bank of England has already said it expects fuel bills to rise by as much as 15% this year. British Gas owner Centrica recently signalled that price rises are on the way.

Scottish Power's tariff hikes mean that a dual fuel customer paying by direct debit will see prices rise by £173 to £1,206. Customers paying by cash on a quarterly basis will see their annual bill rise by £180 to £1,391.

Raymond Jack, Scottish Power's UK retail director, said: "We understand times are difficult for many people, and we have done what we can to absorb these additional costs for as long as possible to minimise the impact on our customers."

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