British Gas have agreed to cut gas prices by 17% and power prices by 11%. This may look like a serious cut but it is really a pretty poor effort given that wholesale prices have more than halved and their recent rises before Winter had huge price increases factored in. This means they are returning to the world of pre Winter when wholesale prices were 20-30% higher than they are now.

Many other suppliers will follow suit and will set prices reductions based on model numbers of how many more customers they require. If for example npower were to reduce prices by 30% overall they could expect to gain many of the 4m customers that switch annually. It is clear that this is a good time to hunt around and that many players will be looking for the rash of supplier annoucements for reductions in green tariffs as well as brown tariffs.