British Gas announces
7% price cut

British Gas has announced a 7% cut in average gas bills - raising hopes for an energy price war.

The company said the reduction would affect eight million households and save customers an average of £55 per year.

Consumer groups welcomed the reduction and urged householders to start shopping around for cheap deals - but criticised the firm for waiting until after this winter's big freeze to pass on falls in wholesale prices. Figures show that the average annual dual fuel bill is now £1,123, compared with £1,310 in January 2009.

Audrey Gallacher, of Consumer Focus, said the reduction was a "rare piece of good news" and called for other providers to follow British Gas's lead.

She added: "People should use the British Gas cut as a trigger to check they're getting the best possible deal - thinking about switching, making sure they're on the right tariff and getting the right advice on energy efficiency. But consumers could have seen prices fall earlier, as energy companies should have passed on wholesale price cuts before winter."

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