Scottish & Southern warns of rise

Scottish & Southern might be forced to raise prices

UK utility firm Scottish & Southern has warned customers it is likely to increase electricity and gas prices.

The warning came as the company said it was on track to grow its annual profits and had seen its customer base increase to more than nine million people.

Last week a report for British Gas owner Centrica said energy bills could rise to more than £1,000 early in the next decade.

Utility companies have said record oil prices are to blame for any increases.

Scottish & Southern chief executive Ian Marchant, said while the company was resisting pushing up prices, the full extent of the "energy shock" on gas and electricity prices was "still to be felt".

"We are continuing to resist the pressure to put up prices for domestic customers, but doing so is becoming more difficult by the day," said Mr Marchant.

Despite high energy prices, the company said it was on course to give shareholders a dividend of growth of at least 4% in 2009 and 2010.

The Perth-based company made a pre-tax profit of £1.2bn in the year to March 2008, in line with analysts' expectations.