Energy regulator Ofgem is to tighten up the rules for new suppliers of gas and electricity after nine new entrants ceased trading.

The latest to collapse was Economy Energy, which ceased trading on Tuesday. Ofgem is looking for a new supplier for its 235,000 customers.

Mary Starks, Ofgem’s executive director for consumers and markets, told the BBC that there was “room for improvement” in the licensing regime.

She also defended the new price cap, according to BBC.

This caps prices at £1,137 a year for an average dual-fuel customer who pays by direct debit.

Speaking to BBC Radio 4’s Today programme, Ms Starks said that new suppliers were subject to rigorous background checks and subject to financial requirements.

“That said, we do said we do think there is room for improvement in the licensing regime and we are conducting a review of our licensing arrangements at the moment, with a view to strengthening our requirements to raise standards in a couple of areas, particularly around customer service and financial resilience,” she said.

Consultation is under way and new rules start to be introduced in April.

One of the areas that would be looked at, she said, was the “readiness [of firms] to weather the challenges in this market”, particularly when wholesale prices of energy go up.