British Gas owner Centrica has announced a sharp drop in profits and that it will be hiking electricity electricity prices.

The company - which operates the Barrow's gas terminals and has operations in Morecambe Bay - published half-year results in a statement to the London Stock Exchange.

These revealed that earnings from its consumer business plunged by more than a quarter after it lost 377,000 UK customer accounts in the first half.

Underlying operating profits from its UK home energy supply arm fell by 26 per cent to £381m as the group said it was also hit by warmer than normal temperatures and the pre-payment tariff cap.

Centrica's overall underlying operating profits were four per cent lower at £816m for the six months to June 30.

British Gas's will hike electricity prices by 12.5 per cent for 3.1m customers, which will hit those already on poor-value energy tariffs, the Government has warned.

The Department for Business, Energy and Industrial Strategy (BEIS) raised concerns over the energy giant's price rise and called for "rapid progress" on regulator Ofgem's plans for reform.

British Gas said its electricity prices would go up on September 15 and would mean an average dual fuel bill for a typical annual household tariff will rise by £76 to £1,120 - a 7.3 per cent increase.

The Centrica-owned group said it will give more than 200,000 vulnerable customers receiving the Government's warm home discount a £76 credit to offset the tariff increase.

But the price rise was condemned by the Government and saw consumer groups repeat their plea for households to switch and fix to get the best deal.

A spokesman fof BEIS said: "Energy firms should treat all their customers fairly and we're concerned this price rise will hit many people already on poor-value tariffs."

He added: "Ofgem has committed to taking prompt action, in consultation with consumer experts, to develop proposals including a safeguard tariff.

"We want to see rapid progress on this commitment and are ruling nothing out."

British Gas is the last of the Big Six providers to increase prices after it promised in December last year to freeze tariffs until August, with its rivals moving to raise bills at the start of the year.

Confirmation of the decision comes after a blunder on Monday saw the group mistakenly publish an incomplete statement about increasing electricity tariffs on its website.

The group said the increase was its first since November 2013 and insisted its overall electricity costs had increased by 16 per cent since then.

Iain Conn, chief executive, said: “Centrica delivered a solid first half financial performance despite reduced energy demand due to warm weather and strong competitive pressures, and we remain on track to achieve the 2017 targets we set out in February.

"We have made further significant strategic progress, continuing to reallocate resources away from our asset businesses towards our customer-facing businesses. With the announced asset disposals and the creation of a new European E&P (exploration and production - with with Norwegian firm Bayerngas Norge) joint venture, we expect the first phase of our portfolio transformation to be complete by the end of 2017, leaving the group well-positioned to deliver longer-term returns and growth.”