Published: Mon, February 06, 2017
Economy | By Melissa Porter

1.4m Npower Customers Face Price Hike

The firm says that this is the first time it's increased rates since October 2013, blaming the rise on increased wholesale energy costs and the cost of delivering various Government policies, but that certainly won't placate the 1.4m people who are set to feel the impact on their budgets.

To provide certainty around future energy bills, fixed tariffs can provide reassurance for existing and new customers. For "dual fuel" customers the rise will be 9.8 per cent, adding £109 to a typical household bill.

"Npower has some of the most engaged customers of any major supplier - one million of our customers switched to another of our tariffs a year ago and around half of our customers aren't on a standard variable tariff (SVT)".

"We've also made sure that our most vulnerable customers won't see any impact until May", he added.

The move affects customers on a standard variable tariff - excluding pre-payment customers (those who pay for their energy in advance using a meter).

A Labour government will legislate to limit future price hikes by the energy companies after one of the so-called Big Six announced it would increase charges by nearly 10 per cent, shadow chancellor John McDonnell said.

A Downing Street spokesman said: "We expect energy companies to treat their customers fairly. You would limit the amount they can increase their prices by".

Meanwhile, a spokesman for the prime minister said ministers would intervene if the energy market was shown to be failing.

Npower's move comes at a hard time for consumers, who will face soaring prices this year after the country voted for Brexit, resulting in the collapse in the value of the pound.

Inflation rose to a two-and-a-half year high of 1.6% in December, and is expected to rise further over 2017 as the cost of imports soars off the back of the British currency's fall.

A spokesperson for Theresa May said: "Obviously, we are concerned by Npower's planned increases".

The decision by Npower eases pressure on others to hold down their own prices, experts warned, meaning they could follow suit.

"It's a sign that higher input prices - seen across United Kingdom industry - are starting to bite". From this summer, a number of power companies - not yet named - will have to state exactly how much a customer could save by moving...

Sterling has fallen almost 18% against the USA dollar and around 10% against the euro since the Brexit vote.

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