Continued bill increases are expected to push the rate to 14.2 percent in January and keep inflation in double digits until at least September 2023, NIESR said. The Joseph Rowntree Foundation said some pensioners faced spending 40% of their disposable income on energy bills next year, up from 10% just a year ago. The debate now is around whether more aid needs to be extended to those in higher income groups. One idea is to expand the household support fund, which local authorities can use at their discretion to help those struggling with their bills. In the interview, the chancellor said the new government must commit to fracking to ensure Britain has adequate gas supplies and revealed he would meet the US Treasury secretary next week to discuss boosting Britain’s nuclear power capacity Britain. He denied the Tory leadership campaign has paralyzed the government as he warned Labor was playing into Vladimir Putin’s hands by criticizing the Conservatives. Mr Zahawi said: “Putin has come to the conclusion that he can use energy as a tool to strike back at us for helping Ukraine. We must be resilient. And we will need to send a message back to Putin that this is not going to soften our resolve to help Ukraine.” Mr Zahawi said he was working with Kwasi Kwarteng, the Business Minister, to help power suppliers with loans so they have more liquidity – a move he said could “put downward pressure on the price ceiling between 400 and £500′. . He said the idea, which had previously been rejected, is now “back on the table”. Mr Zahawi said he had also drawn up a list of options to help businesses hit by high energy prices, such as hospitality, leisure and agriculture. “If we don’t help these small and medium-sized businesses, my concern is the scarring effect, the long-term scarring effect on the economy,” he said. “So what have we done about business rates, what have we done about VAT for certain sectors like hospitality. So we are working on all these options to consider. “And of course Liz Truss has been talking about lifting a moratorium on green levies for a couple of years. We’re also looking at this, which will help everyone by around £150. Asked about predictions that the price cap could rise by more than £6,600 in April, Mr Zahawi suggested the government had not ruled out freezing the price cap at some stage. “We haven’t ruled anything out,” he said. “Everything is still on the table.” He added: “My concern about this is that it is universal. You’re helping wealthier households, households like mine, where we can take the added pressure of high energy costs, and that takes away from your ability to be resilient in the long term. “It would be about £100 billion in about 18, 24 months. If I targeted that help, I could offer more help to the most vulnerable. And of course, it allows me to help more SMEs, who will really need the help as well.” On his ideas for a long-term energy strategy, he said: “If we’re going to effectively build a resilient energy system, nuclear has to play a big part in that. “On the throttle, I feel like the pendulum has swung too far. Certainly in the city because people just weren’t financing gas projects.” To push fracking, he said: “The way you get fracking going is if a local community feels they can really benefit from the positive effects of that gas production, and then they’ll support it. “They did it very successfully in France with nuclear, so people who live within a certain radius of a nuclear project get electricity in their homes for life.” Mr Zahawi denied the Tory leadership contest had crippled the government’s efforts to tackle the energy crisis, saying the Treasury “hasn’t stopped working”. “They didn’t down tools because we had a political drama. I know Labor want to turn this into an argument, but that will be for Putin’s benefit. I honestly say this, as in the pandemic. “We have to come to an agreement. The worst thing we can do now is to turn this into a domestic political dispute, instead of coming together, being resilient and sending a message to Putin.” Meanwhile, the head of the Federal Reserve told US families to expect “pain” as he rallied central bankers around the world to further fight inflation by raising interest rates. Jerome Powell vowed to “forcefully” use all the Fed’s tools to deal with spiraling US rate hikes.
