Business Stream and Castle Water are both “committed to competition” and will keep each other under pressure in the English water retail market.

Castle Water chief executive John Reynolds told Utility Week: “I am fascinated that we are both on the overlapping and neighbouring patch with Business Stream.”

He said having two companies that are used to competing and are “committed to a competitive market” both being active and keeping each other under pressure is “a healthy situation to be in”.

“It is very interesting to take competition from Scotland where they are incumbent and we’re clearly new entrant to England where we’re larger than they are, and seeing how that develops,” he added.

“It is very constructive that we’ve got this combination of companies in southern England that are both committed to the market.”

Castle Water bought the business customer base of Portsmouth Water when the incumbent water-only company announced its intention to exit the market in January this year.

The Scottish new entrant then bought the business customers of Thames Water when the UK’s largest water company announced its exit from the market in July.

Meanwhile, Scottish incumbent retailer Business Stream bought the business customers of Southern Water when it announced its exit at the end of June.