Energy giant Ovo has launched its first deal for customers cheaper than the government’s cap on household bills.

The firm will offer a fixed 12-month tariff of £2,275 for existing customers, at a time when the government is limiting typical household bills to £2,500.

It comes as falling wholesale gas prices start feeding through to bills.

One expert urged caution on Ovo’s deal, predicting there would be cheaper deals in the months to come.

Ovo Energy, which provides power to more than four million homes, said it was launching the tariff because customers wanted “the security of a long term fix to protect them against the continuing energy price uncertainty”.

But Mr Martin Lewis, from MoneySavingExpert, said: “People need to be very careful not to just jump on a fix because it costs less than they’re paying right now… because wholesale rates – the rates energy firms pay – have dropped, it’s likely the price cap will drop, and on current predictions that means you’ll start paying 20% lower rates than now. That price is predicted to stay around that point until the end of the year, and into early 2024.”

Experts have been predicting household bills will fall this summer as suppliers strike new long-term deals to buy cheaper gas.

At that point the government’s Energy Price Guarantee (EPG) – which is being held at current levels until the end of June – will no longer be needed, they add.

Last month analysts at Cornwall Insight forecasted that Ofgem’s energy price cap – which in normal times limits what suppliers can charge per unit of energy – will fall to £2,153 a year from July.

And earlier this week, analysts at financial firm Investec said the cap could go as low as £1,981 a year from July – although this would still be significantly higher than it was before Russia’s invasion of Ukraine.

Experts believe at this point households might once again be able to shop around for more competitive energy deals.