A think tank has today said the Chancellor is likely to spend £3 billion to keep energy bills locked at £2,500.

According to the Resolution Foundation, a £30 billion Budget windfall could be employed by Jeremy Hunt to protect families against rising energy and fuel bills.

ELN has already reported that in next week’s Budget, the Chancellor is expected to extend a cap on typical household bills for another three months.

The think tank believes that Mr Hunt still faces ‘tough choices’ despite the unexpected windfall for the public finances, with borrowing this year around £30 billion lower than official forecasts.

On Friday, Energy UK’s trade association urged ministers to use that surplus to freeze the Energy Price Guarantee (EPG) at £2,500 and confirm this as soon as possible.

It said delaying the announcement would “risk the correct rates not being implemented in time”.

Energy UK’s chief executive Emma Pinchbeck said: “We’ve been urging the government, and the Treasury in particular, to take the opportunity provided by falling wholesale prices reducing the cost of the scheme and hold the EPG at £2,500 to provide much-needed respite for customers.”