The announcement comes after a 23 percent jump in profits for Centrica owned British Gas.

An average customer of British Gas can expect to see their bill increase by £80 to £1,318. The move comes as the UK’s North Sea gas supplies begin to dwindle and British Gas is forced to enter a competitive global marketplace.

The move is expected to be followed by other gas and electricity suppliers.

British Gas managing director Phil Bentley said: “Unfortunately, we cannot run our business sustainably on lower margins and still make the investments in jobs and future energy sources that Britain needs, especially if the country is to grow its way out of recession.”