Centrica, parent company of British Gas, has warned that 2008 profits will be at the lower end of analysts' expectations as it faces a 77pc increase in wholesale gas prices this winter.

The energy firm hinted that although it had put up prices in January, customers should expect even higher bills by the end of this year as British Gas struggles to improve its margins.

"Following our retail price increase in January, the wholesale gas price continued to rise, which has caused profit margins in British Gas in the first half of the year to be squeezed to levels below our long-run expectations," it said in a trading update yesterday. ... Read full article