Businesses should consider longer-term energy contracts to mitigate rising electricity and gas prices, said the Energy Advice Line.

According to the online business electricity and gas price comparison service, in the past 12 months, electricity prices had risen by about 11%, with companies on short-term contracts hit hardest by price rises.

Electricity costs for one-year contracts had risen by around 15% in the past year, and although companies that signed up to three-year contracts had started at a higher rate, they were now paying less than the average.

“Firms that signed up to the shortest-term deals a year ago would have been financially better off signing up to a more expensive three-year deal,” said EAL managing director Julian Morgan.

“Businesses would have paid a premium for a three-year contract but because prices have risen so substantially, they are now better off.”

The company’s quarterly review revealed that 87% of UK firms opted for the cheapest short-term deals.

Mr Morgan advised companies to consider longer-term contracts when signing up to a new energy deal. “Taking a short-term view in a market where prices are rising could be the wrong decision,” he said.

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