Letters warning of 10% energy price rises expected to start hitting doormats in next two weeks

By Jon Rees

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Households should be braced for a energy bill bombshell later this month, with letters alerting them to price rises expected to start hitting doormats in the next two weeks.

City experts argue that pressure from investors to protect profits and the need to give consumers plenty of notice of any price rises means hikes of ten per cent or more will have to be announced within the next two weeks.

Energy companies must give customers 30 days’ written notice of price rises and in order for them to do it before demand goes up when cold weather arrives, they are likely to send out letters shortly. 

Energy companies are expected to start informing customers that their bills are going increase

Energy companies are expected to start informing customers that their bills are going increase

Investment bank Credit Suisse said that after the start of December, each day that Centrica, which owns British Gas, delays putting  up prices by 10 per cent could  knock £2.5 million off its profits for 2013, while in the case of SSE, its profit margins could suffer in any delay.

SSE and British Gas are expected to announce price rises before their quarterly statements come out in mid-November.

Neither Centrica nor SSE was prepared to comment on any future price rises, though SSE said it would resist as long as it could any upward pressure on prices.

Labour leader Ed Miliband last month put energy prices at the centre of the political debate when at the party conference he promised to freeze energy bills for 20 months from 2015 if he becomes Prime Minister.

 

While there have been suggestions that the Government might respond in some way on specific items, such as bank charges and utility bills, it is understood that Chancellor George Osborne will say in his Autumn Statement that the best way to cut the cost of living is to focus on wider economic recovery.

Though British energy bills are some of the lowest in the western world, the current average annual dual-fuel bill is £1,420. Bills have risen by an average of £300 over the past three years.

However, average wages rose by just over 1 per cent during the last financial year.

Energy prices are expected to go up even if fuel prices remain broadly flat due to higher transmission and distribution fees, the increasing cost of energy company obligations to install insulation in homes and fixed-cost overheads.

Gas is usually bought on the wholesale market by energy firms months or even years ahead, so day-to-day price variations often have little effect.

Indeed, daily wholesale prices dropped last week, with enough gas available for energy companies to pump excess product into storage.

Meanwhile, Centrica announced on Friday the appointment of a new chairman, Richard Haythornthwaite, who is currently chairman of MasterCard.

He will take over from Sir Roger Carr in  January.

The comments below have not been moderated.

10% rise will add to inflation CPI which will mean increases in all benefits and pensions. Sadly this will happen after the November date for setting annual CPI, no surprise there.

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How do I pay a 10% increase out of my 0% pay rise?

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Hey! I've got a great idea. Why not stop WASTING energy?

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The only way to beat the energy companies is to become a fat cat shareholder. British Gas are paying a MASSIVE dividend of around 1.5% on their share price. You would only have to invest a MEAGRE £90K or so to recoup the cost of the average annual energy bill.

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The elites of this world believe there are too many of us who use way too much in the way of energy and resources. The carbon taxes, price rises of gas, electricity, water etc etc, is one way of forcing austerity and making the rest of us use less.

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my best friend's step-aunt makes $87 hourly on the computer. She has been out of work for nine months but last month her paycheck was $12968 just working on the computer for a few hours. Continued>>>>>>>>>> ­Works23.CoM

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Rates go up yet they are making huge profits..... Something wrong here and should be stopped

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Thought so as every time they are about to raise prices we get a big tv ad campaign trying to promote an image of a caring customer focused company. True to form the little British Gas worlds are back on our telly bigging up their services etc!

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What's new? It's every year and just before winter, profiteering on a national level.

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Invest in rising gas prices. They are going up by 10%!

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