The City roundup video: Water companies to slash bills by 5 per cent

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A woman fills up a glass with water. (Franck Fife | AFP | Getty Images)

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Regulator Ofwat delivered an early Christmas present to bill-payers today when it ruled that water companies must cut prices by an average of 5 per cent over the next five years and spend an extra £44 billion to improve services.

From April 1 next year, average bills will fall by around £20 from £396 to £376.

Only three of Britain’s water firms, Pennon, Severn Trent, and United Utilities, are still listed on the London stock market, with the rest mostly owned by complex foreign investment consortiums.

It may only be an extra £20 in our pocket each year but it’s better than paying more – especially at a time when supermarkets are cutting prices and the cost of oil is tumbling.