An energy company has announced a 2.5% price cut for consumers, saying the mild winter weather has meant gas and electricity are cheaper.

Ovo Energy claimed the reduction meant its bills were now about £180 a year cheaper than the average of the Big Six companies that supply the bulk of the UK's households.

The "insurgent" ­company's chief executive, Stephen Fitzpatrick, said the energy market was not working efficiently for consumers, with the big companies relying for much of their profit on customers' reluctance to switch.

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Mr Fitzpatrick said: "What we've seen is the weather over this winter has been quite mild and it has led to gas and electricity prices falling by about 6% or 7% and on top of that we are starting to see some impact from the Government policy."