British Gas today cut standard electricity prices by an average of 10 per cent.

The energy giant, which supplies electricity to one in four homes, said the reduction for 4.5million customers would come into effect immediately.

The move follows the company's 10 per cent reduction in gas prices, which came into force in February.

British Gas, which is part of Centrica, said the total saving for a dual fuel customer at average consumption was about £132.

The average annual dual fuel bill for a British Gas customer is now £1,127, making it the cheapest in the UK for customers who pay by monthly direct debit, the company claimed.

Managing director Phil Bentley said: "British Gas is offering existing and new customers the cheapest electricity rates in the market place."

British Gas said the recent fall in wholesale electricity prices meant it was able to pass on today's cut in tariffs. Other energy companies - many of whom raised prices significantly last year - have come under pressure to cut bills to reflect falling wholesale costs.

These have dropped in line with the cost of oil, which has retreated dramatically from its peak of $147 a barrel last summer to about $50 as the economic crisis deepened.

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