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Centrica falls after spat with Tories over price cap

Centrica falls after spat with Tories over price cap

by Daniel Grote May 09, 2017 at 10:10

Centrica (CNA) has fallen towards the bottom of the FTSE 100 after trading blows with the Tories over their election pledge to cap energy prices.

Shares in the British Gas owner fell 2.9% to 196.6p after UK business secretary Greg Clark took to the Today programme to defend the policy after Centrica used a trading statement yesterday to criticise the plans.

'Centrica does not believe in any form of price regulation,' it said in the statement. 'Evidence from other countries would suggest this would lead to reduced competition and choice, and potentially higher average prices.'

But Clark said the government was acting to curb 'abusive' behaviour from the 'big six' power companies, saying the Competition and Markets Authority (CMA) had estimated £1.4 billion of overcharging a year.

Centrica is seen as the most exposed to the Tories' price cap plans, but SSE (SSE) would also be affected. Its shares were down 1.2% at £14.32.

Joining Centrica at the bottom of the index was Micro Focus (MCRO), down 8.2% at £24.22 after the software group warned revenues at Hewlett-Packard Enterprise, the US company it is buying, had fallen 10% in the last quarter.

But miners helped the FTSE 100 shoulder those losses, rallying as the copper price rebounded. Risers included:

  • Glencore (GLEN) +2.5% at 291.6p;
  • Antofagasta (ANTO) +2.3% at 770.5p;
  • Anglo American (AAL) +2.2% at £10.32;
  • BHP Billiton (BLT) +2.2% at £11.50.

Among 'small cap' stocks, Sepura (SEPU) surged 22.7% to 12.6p after the government cleared the way for its £74 million acquisition by China's Hytera Communications (002585.SZ).

Business secretary Greg Clark's approval of the deal means it will no longer need to be referred to the CMA.

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Comments  (5)

  • alan thorburn: 

    If the cap fits...

    11:47 on 09 May 2017

  • Lee Whitehead: 

    And what's going on with RR? no mention there

    16:05 on 09 May 2017

  • In the Dark: 

    Daft idea from the Tories. Political interference in market behaviour will no doubt end in tears for the consumer.

    Only saving grace is that Labour have some bad Private sector proposals.

    21:46 on 09 May 2017

  • Mickey: 

    Not really that daft as an election tactic. Energy companies deliberately mislead with their umpteen price bands and various offers. Why do they need to have so many prices for the same product? We should hammer them until they are far more honest in their pricing, Centrica complaining that the average price may be higher just confirms their awful policy of charging folk different prices depending on how savvy you are.

    08:34 on 10 May 2017

  • Jon Page: 

    Quite right Mickey.

    Why should I have to waste precious time switching suppliers and comparing prices every year when my "deal" runs to an end. This also discriminates against those non-IT-Savvy demographics (eg elderley, poor).

    One single fair price would be better and less of an annual pain-in-the-arse for all.

    There would still be competition between suppliers, just less obscure and dishonest pricing.

    09:18 on 10 May 2017

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