A new price reduction announced by major energy supplier British Gas could lead to lower industry prices as rivals look to compete.
British Gas has lowered its electricity prices by ten per cent with immediate effect and although it is the last energy company to announce such a reduction, it is the largest so far produced.
The company's rivals may respond with a wave of similar reductions in order to present a more attractive option to homeowners who are shopping around for the best deals during a time of economic turmoil.
Mark Todd, director at comparison website Energyhelpline, said: "British Gas now has the cheapest standard tariff for dual-fuel customers. Other suppliers will hate this and we expect them to retaliate soon with price cuts of their own."
British Gas was the first company to reduce its gas prices earlier this year, but it stopped short of introducing a similar cut to its electricity costs.
All the UK's energy companies were criticised for failing to cut prices during the winter.
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