British Gas hikes prices by more than 10%

British Gas (BG) is to raise prices by an average 9.2%-three times the rate of inflation-insulting further misery on cash-strapped families.

The increases, including an increase of 8.4% for gas and 10.4% for electricity, will affect 7.8 million customers and introduced on 23 November. Annual dual fuel Bill of the average customer will increase by £ £107 to 1,297.

The Government expressed its disappointment at the announcement and said the figures used by British Gas to justify its price increases "doesn't add up".

Ian Peters, CEO of British Gas residential energy, said: "we have not taken this decision lightly, but what is pushing energy prices at the moment are costs that are not directly under our control, such as global energy prices, taxes that we have to pay to use the national network that supplies energy to the home and the cost of social and environmental programmes of the Government.

But the Government's Energy Secretary, Edward Davey, accused BG of not being transparent, when calculating the price increase. He said: "this is very disappointing news for customers of British Gas and the company must justify this decision openly and transparently.

"I recently wrote to energy companies, asking them to publish their costs of delivering the energy company obligation (ECO). Today's announcement shows why this is necessary, because only numbers of British Gas ECO is doesn't add up when you look at what other energy companies, saying their costs. "

BG is the second energy supplier to raise prices after the announcement of SSE on October 10 that customers will pay $ 8.2% more for their gas and electricity by 15 November.

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Energy experts reacted with dismay to the announcement-and warned that further rises may come from the remaining six big energy groups.

Clare Francis of Moneysupermarket.com said: "it was only a matter of time before British Gas inflicted the blow to its customers and has announced price increases. Largest energy company in the United Kingdom had warned that prices would have to rise, but the novelty will be a bitter pill for them to swallow.

"And will not stop there. We can expect another four main suppliers-EDF, e.on, npower and Scottish Power-even announce prices hikes in the coming weeks. "

An increase in the general price level that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is 4 percent, this means that the price of goods and services is 4% higher than a year earlier, requiring extra 4% and spend to buy the same things that we bought 12 months ago and that any savings and investments need to generate 4% (after taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer price index (CPI) as its official measure of inflation (see also retail price index).

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