Yahoo Finance Energy bill help will tackle inflation, ONS confirms
The Government’s promise to pick up a large chunk of household energy bills will reduce the official inflation figures, the Office for National Statistics has confirmed.
The official statisticians said that they would not count any increases to energy bills above the capped price towards inflation.
The Government has promised that no household in the UK will pay more than 34p per unit of electricity and 10.3p for every unit of gas that they use.
For the average household that will mean that bills reach around £2,500 per year, however, households that use a lot of energy can pay more and people can reduce their bills by using less.
The support was announced under former Prime Minister Liz Truss, and was initially meant to last for two years. This was later reduced by Chancellor Jeremy Hunt to just six months, after which it will be reviewed.
The Government would pick up any extra payments above the 34p and 10.3p unit prices.
The Government said at the time that it already expected that its support would help reduce inflation. On Monday the ONS confirmed this after consideration.
“The implication for consumer price inflation of the classification decision is that the EPG (Energy Price Guarantee), as a subsidy on products paid by central government to energy suppliers, influences the prices that domestic consumers are charged for a unit of gas or electricity.
“It is these reduced unit prices that will be used in compiling” consumer prices inflation figures, the ONS said.
Inflation “will hence be lower while the schemes are in operation than if the EPG had not been introduced”, it added.
The ONS also said that producer price inflation, which impacts business, will be lower thanks to the Government’s separate bill support for companies.
