E.ON, the energy provider, has become the latest to reveal prices rises above the level of inflation, by adding 15 per cent to the price of gas and 9.7 per cent to electricity from tomorrow.

The increase by the German-owned company, formerly named Powergen, will affect almost five million customers.

E.ON's announcement comes in the wake of large price increases by four of its five key competitors. Npower unveiled price hikes of 17.2 per cent for gas and 12.7 per cent for electricity on January 4. On January 15 rival firm EDF said it was upping gas prices by 12.9 per cent and electricity by 7.9 per cent. British Gas announced price hikes three days later of around 15 per cent and on February 1, Scottish Power said its prices would rise by a similar amount.

The only other major UK retail energy supplier, Scottish & Southern Energy, has pledged to leave its prices on hold until at least the end of March.

The announcement from E.ON, which like the others has blamed rising wholesale energy prices as well as the growing costs of investing in low carbon power generation, comes just two days after a House of Commons Select Committee said it would investigate claims of anti-competitive behaviour in the UK energy market.

The Department for Business Enterprise & Regulatory Reform (BERR) Select Committee is chaired by Peter Luff MP, who said it would examine whether the current market structure encourages effective competition in the retail markets for gas and electricity and whether there is effective competition in the wholesale markets for both.

Scott Byrom, utilities manager at price comparison site moneysupermarket.com, attacked the timing of E.ON's announcement, which came as the Bank of England slashed interest rates by 25 basis points.

"It’s a cynical move by E.On to try to bury this announcement on the day of a Bank of England interest rate decision. This move will have the greatest negative impact on customers in Eastern England, the East Midlands and most of North West England who will see any mortgage savings wiped out.

EON firmly rejected the claim that it had timed its decision to coincide with the BoE announcement.

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