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The CMA is expected to deliver a “tough message” when it reports its preliminary decision on remedies for the energy market this month, according to Citigroup.
In a note published this morning, the analyst said it “expect[s] the decision from the CMA investigation to reveal a number of measures to promote retail competition.”
However, it suggested that the CMA’s introduction of a regulated tariff would be limited to vulnerable customers, rather than the whole market, adding: “We do not expect further actions to remove retailers’ ability to set their own margins.”
With regard to Centrica, Citigroup said it expects retail margins to stay higher for longer, highlighting the potential for the company to increase its retail margin on gas even while making double-digit price cuts. It said: “This, combined with a lower for longer commodity price environment, should reduce political pressure on Centrica.”
Meanwhile, the Daily Telegraph reported this morning that the CMA is considering a move to end indefinite standard tariffs and ‘force’ customers to choose a new deal each year.
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