Northumbrian Water warns on bills

Northumbrian said it had met all its leakage targets this year

The boss of Northumbrian Water has said that keeping water bill rises in line with inflation will be "a challenge".

"We'd like to keep water bills as close to inflation as we can," the company's chief executive John Cuthbert said.

Mr Cuthbert blamed rising energy costs, spending on a reservoir and investment in preventing sewers flooding for putting pressure on bills.

The comments came as Northumbrian reported full-year pre-tax profits of £170.3m, up 15.2% from last year.

Expansion

Northumbrian Water supplies water and sewerage services to 2.6 million people in the north east of England, and supplies water to 1.7 million people in the south east of England where it trades as Essex & Suffolk Water.

This time last year, the company announced that it would not be passing on the price increases that had been authorised by the water regulator, Ofwat.

The company is spending £140m on expanding the Abberton Reservoir in Essex by 60%, a project that is expected to be completed by 2014.

It said that higher energy prices would add more than £8m to its operating costs this year.