SSE could be forced to slash its dividend as the UK’s energy markets continue to struggle this year, experts warned.

The UK’s second largest utility faces further market gloom that will stretch an already strained balance sheet and force the group to revisit its “precarious” dividend policy, top city analysts said.

SSE said earlier this week that it expects profits from its energy retail business to be lower than last year but will still pay out a dividend “at least equal” to inflation, after operating profits from its gas and power business held firm.

But analysts at RBC Capital warned that the healthy showing from SSE’s generation business was “very much a one-off” because the wet and windy winter boosted its renewables output.