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.

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."