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Sunak warned another support package will be needed before winter

British Chancellor of the Exchequer Rishi Sunak leaves Millbank Studios after a media interview in London, Britain, May 27, 2022. REUTERS/John Sibley
Chancellor Rishi Sunak has refused to rule out another emergency package. Photo: John Sibley/Reuters (John Sibley / reuters)

Economists have warned that chancellor Rishi Sunak will come under pressure to deliver another emergency aid package to help millions of people deal with high energy bills during winter.

“I do think it is likely that more will be needed and (…) I definitely think that during the winter there may be a call and support for further support and a need for that,” Rebecca McDonald, head of economics at the Joseph Rowntree Foundation told the Treasury Select committee.

She told MPs that “there would definitely” be enough information for the chancellor to assess whether UK households need more help by the time of the Autumn budget.


“It would need to be by Autumn to make a difference for families,” she added.

The deputy director of the National Institute of Economic and Social Research (NIESR) said that the government will probably have to announce yet another round of measures to help UK households as soaring energy bills will increase even further in October.

Read more: Rishi Sunak £15bn support package to cut every energy bill by at least £400

“The key thing is when we know what is going to happen to heating bills in October. My gut feeling tells me that the package that was announced recently will not be enough and will have to be revisited in the Autumn budget," Stephen Millard, deputy director at NIESR, said.

UK households face even higher bills as the boss of the UK's energy regulator has warned that the energy price cap is expected to rise to around £2,800 in October.

"Now, this is uncertain, we are only halfway through our price cap window but we are expecting a price cap in October in the region of £2800," Jonathan Brearley, CEO of Ofgem, has warned.

Gemma Tetlow, chief economist at the Institute for Government told the Treasury committee that without further help, UK households will be even more squeezed next year.

“Wages this year will not grow this year as quickly as inflation so those households [not on benefits] are likely to face lower real term incomes next year when the £400 payment expires,” she told MPs.

However, she believes the chancellor will only act in Spring, ahead of the April energy cap review.

UK chancellor Rishi Sunak has consistently refused to rule out another emergency package as UK households struggle to pay bills amid soaring inflation.

Asked if he is prepared to return with another emergency package next year even if it requires more borrowing and taxes, Sunak told BBC Radio 4’s Today programme last week: “People can judge me by how I’ve acted over the last couple of years.

Read more: Rishi Sunak insists he’s a ‘pragmatist’ amid criticism of rising taxes and spending

“I’ve always been prepared to respond to the situation on the ground, what’s happening to the economy, what families are experiencing and making sure we’ve got policies in place to support them through that.

“In terms of ‘is it one-off?’, what’s happening next year, I’d go back to what I said earlier. I do want people to be reassured and confident that we will get through this. We will be able to combat and reduce inflation, we have the tools at our disposal and after time it will come down.”

The chancellor has ditched the previously announced £200 loan on energy bills and replaced it with a £400 grant that will not have to be paid back. This means that every UK household will get an energy bill discount of £400 this October as part of a package of new measures to tackle soaring prices.

In addition, Sunak announced extra support for 8 million of the country’s lowest income households, with those on means tested benefits set for a one off cost of living payment of £650.

The chancellor also announced more money for pensioners as those who receive the winter fuel payment who will get an extra one off payment of £300

There will also be an extra payment for 6 million people who receive non-means tested disability benefits who will receive a one off payment of £150.

Watch: Why are gas prices rising?