British Gas-owner Centrica said on Wednesday it would raise gas and electricity prices for households by 35 percent and 9 percent respectively, citing high wholesale gas prices.
The company, the biggest household supplier in the country with over 16 million customers, said profits at its British Gas Residential unit had fallen 69 percent in the first half, while wholesale prices for the coming winter are up nearly 90 percent on the previous year.
Centrica shares rose 1.5 percent to 314.75 pence by 3:09 p.m., valuing the business at 11.7 billion pounds.
"We very much regret that we have had to make this decision at a time when many household budgets are already under pressure," British Gas Managing Director Phil Bentley said in a statement.
He added that the firm would be contacting all its customers to show how they can save energy to offset the price rises.
The bill hikes, which are 25 percent for customers who buy both gas and electricity from Centrica, will come in with immediate effect.
Centrica is the second of the six major suppliers to the market to raise prices in less than a week, after French supplier EDF Energy hiked gas and electricity bills 22 percent and 17 percent respectively on Friday.
The other four are expected to follow suit sometime before the winter months. They are RWE-owned nPower, Iberdrola-owned Scottish Power, E.ON UK and Scottish & Southern Energy.
The trend of repeated rounds of price hikes by the main suppliers was criticised in a report by MPs on Monday, which said the market did not operate efficiently and that it was easy for companies to predict what their rivals were going to do.
