Two major UK energy firms are in advanced merger talks that would create the country's largest supplier in terms of customer base, surpassing current leaders British Gas and Octopus Energy.
Merger details
According to Sky News, discussions between EO.N and OVO Energy have accelerated in recent weeks, though it remains unclear whether a deal has been finalised. If completed, the combined entity would serve more customers than any other supplier in Britain.
Other energy companies, including EDF and Telecoms Plus (which trades as Utility Warehouse), have also expressed interest in acquiring OVO Energy, reports suggest.
Expert advice on energy bills
Consumers across all suppliers have been urged to increase their payments to prepare for anticipated price rises. Stuart Mills, Assistant Professor of Economics at the University of Leeds, writing in The Conversation, explained: "The conflict in the Gulf is just the latest shock to the energy supply chain. And the tricky thing with supply chains is disruption takes time to be felt."
He added: "Even if a peace deal sticks, consumers and businesses can still expect higher prices to ripple through the energy market for months. As such, think about the behavioural economics of what's known as 'intertemporal choice' – your spending over time."
Mills warned of "present bias": "People often excessively discount the future and focus on the present when choosing how to spend money. Today, there are widespread expectations of higher energy prices, but (for now) they remain around pre-war prices."
He continued: "In the future – when the war is over – there will be widespread expectations of lower prices, but the current disruptions will still be rippling through the system. This mismatch between expectations and reality could leave people with a nasty surprise when their bill comes through."
His advice: "So, pay it forward. Don't fall into the trap of present bias. If you can, increase your energy bill payments today. Economists call this 'smoothing out' your consumption. When higher bills bite, you'll be (psychologically) better off for it."
