The suppliers have come under increasing pressure to pass on the savings from falling wholesale prices.

E.ON said its decision would benefit 3.7 million of its 4.5 million electricity customers and would equate to a £31 reduction on an average annual bill. The 6% electricity price cut compares with an 11.4% increase E.ON implemented in September.

E.ON made no reduction in its prices for gas, which it increased by 18.1% last year.

The company supplies around 3 million households with gas and said it had chosen to cut the fuel for which it had most customers.

Dr Tony Cocker, E.ON UK chief executive, said: "Reductions over the last few months in the wholesale price that we pay for our customers' energy have now allowed us to help as many of our customers as possible by cutting our electricity price."

Scottish Power said its gas price cut would affect around 1.4 million customers, saving those dual fuel customers on direct debit around £36 a year. It did not reduce electricity prices.

The company increased gas prices by 19% and electricity prices by 10% last year.

Adam Scorer, policy director at Consumer Focus, welcomed the price cuts but warned that customers would "still be paying a lot more for their energy than they were a year ago".

16 January 2012 The Telegraph