That's bad news for six million British Gas customers and unjustifiable given that British Gas's costs have dropped by 9 per cent since December past year.
"Since our last price rise in November 2013, some costs have risen steadily - among them government policies to subsidise renewable energy, social levies, delivery to customers' homes, and the nationwide smart metering programme", British Gas chief executive Mark Hodges said in a statement.
Centrica-owned British Gas 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.
Angry British Gas customers have taken to Twitter to say they will be shopping around for a better deal. Centrica's share price rose 2% in early trading.
British Gas's standard variable tariff for electricity is now the cheapest of all Big Six offers - however, according to consumer website Uswitch, it is still £286 more expensive compared to the rest of the market.
Details of the change in tariff came as Centrica revealed British Gas lost 377,000 United Kingdom customer accounts in the first half of 2017.
In a separate statement on Tuesday, Centrica said electricity prices at British Gas will rise 12.5% for standard tariffs from "mid September", with the gas price to be kept at current levels.
"And that means if, as is possible, we see another batch of rises this coming winter, its customers will feel like they've been price-slapped twice in rapid succession".
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He added: "We're now selling our electricity at a loss, which is clearly not sustainable".
Alex Neill, of consumer group Which?, said: 'Hard-pressed consumers waiting to see how the government will tackle costly standard variable tariffs will be disappointed to see prices rising.
Researcher for the Common Weal Scottish think tank, Craig Dalzell, said that the hike had once again highlighted the "oligopoly" in the UK's energy market.
It said it was on track to meet its 2017 targets and managed to bring down debt into a range it had been targeting to reach by the end of the year.
Angry customers responded to the price hike on Twitter, with one writing: "I haven't had a pay rise in 4 years!" The average household bill on its dual fuel tariff is forecast to rise by about GBP76 per year to GBP1,120, up 7.3%.
If you don't know your energy consumption details then don't worry, the comparison sites will allow you to answer a few questions about your lifestyle to provide you with a personal estimate.
British Gas owner Centrica claim the rise "reflects an underlying increase in policy and transmission costs".