The company said the reduction, which will take effect from March 15, would benefit more than one million customers and reduce the average annual standard gas bill by £32.

It follows SSE’s announcement on January 28 that it will lower standard gas tariffs by 5.3 per cent.

E.ON also said on January 20 that it would lower gas prices by 5.1 per cent from February 1.

Neil Clitheroe, Scottish Power’s chief executive of retail and generation, said: “Over the past year, we have tried to always offer our customers competitively priced dual fuel tariffs. This has encouraged more of our customers to switch between tariffs with now close to one in two on fixed price products. This is one of the highest proportions of fixed price customers of the major suppliers.”

Energy sector watchdog Ofgem welcomed the announcement but said that prices should be falling more quickly.

Ofgem’s senior partner for consumers and competition, Rachel Fletcher, said: “This is a movement in the right direction for loyal customers, but the size of today’s price cut is dwarfed by the savings available by switching from a standard tariff to a fixed deal. You could save more money, up to £300, faster by switching.”