British Gas cuts electricity prices: will others follow?

Is this the sign of things to come? British Gas' announcement that it is cutting electricity prices by 10% will be a boost to customers struggling to pay their bills in the current climate. The cut follows the company's 10% cut on gas prices, which took effect on 19 February this year and as a result of these, British Gas customers will save on average £132 in total on their annual household energy bill.

The move means that British Gas is now the cheapest electricity supplier in the UK. It has also brought out Websaver 3, which is the cheapest online energy plan on the market.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "This cut will be some relief for those British Gas customers who are struggling to pay bills - it makes British Gas cheaper than any other electricity supplier in the UK, and it also means that they've got the cheapest online plan. This is giving choice to consumers, who had to deal with a 42% increase in energy prices last year.

"Rather than holding out for further price cuts, consumers should help themselves now by making sure they are paying the lowest possible price for their energy and learning to use less of it. Moving to dual fuel, paying by direct debit and signing up to an online plan will all help save money - in fact switching to a competitive plan could cut your energy bill by up to £350. British Gas is helping consumers with this by offering the cheapest online plan on the market."

British Gas increased its prices by 46% or £416 during 2008. Its average household energy bill at the beginning of 2008 was £912. After today's cuts it will be £1,194 - £282 or 31% higher than a year ago.