Both gas and electricity prices will see a steep increase next month. British Gas blames the rise on the unrest in the Middle East and North Africa, and the increased consumption in Asia.

British Gas increases prices (Reuters)

Millions of British Gas customers are to face higher utility bills after the company said it is putting up the price of both gas and electricity. Gas prices will rise by an average of 18 per cent and electricity bills by an average of 16 per cent.

The increases, which will come into effect from August 18, will see the average dual fuel energy bill rise by £190 a year.

The announcement was made at 10am today - as Prime Minister David Cameron was in the middle of announcing plans to deal with the News of the World phone-hacking scandal.

British Gas said it had raised its prices in response to a 30 per cent hike in wholesale prices since last winter.

It is the second of the "big six" companies to put up prices after Scottish Power announced a 19 per cent hike in gas prices and 10 per cent hike in electricity last month. Other companies are expected to follow.