More energy bill support for struggling households predicted to come next year

A think tank has warned calls for help will continue next year if energy prices remain high

Big Zero Report 2022

The government has been warned calls for additional measures to support struggling customers against rising energy bills are likely to continue next year.

The London-based Institute for Fiscal Studies (IFS) think tank has said ministers may come under pressure again.

Last Thursday, the Chancellor announced a £15 billion package of measures to help people who the soaring cost of living.

Speaking to the BBC’s Today programme, IFS Director Paul Johnson commented on whether the new government funding could exacerbate inflation.

Inflation, which is the rate at which prices rise, is already at a 30-year high and set to hit 10% by the autumn.

Mr Johnson said: “I think the biggest risk here is that the Chancellor will be tempted to do this again and again. And I think, if that happens, then we really could be in for a bit of trouble.

“He’s got the most extraordinarily difficult decisions to make later this year on public sector pay and then he will be on the pressure I suspect again, come this time next year, when LNG prices will still be high, households will still be struggling to put more money in.

“I think if he’s tempted to continue putting money into an economy where inflation is very high, then that becomes a significant risk at this point.”

Earlier this month, the Bank of England’s Monetary Policy Committee warned the expected increase in energy bills in October could add 1.5% to Consumer Prices Index (CPI) inflation.

Mr Johnson said policymakers need to be “very careful” about putting more money into the economy in periods of high inflation.

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