The cap is being lowered but households will still see their bills go up from April. This is because government support that has been protecting people during the energy crisis will be reduced.
National Energy Action, a charity, predicts that the number of fuel poor households will rise from 6.7 million to 8.4 million from April if the government reduces the support.Cost of living - latest: Warning energy bill rises will be 'hammer blow' to households; Tesco to sell home testing kits that can spot bowel cancer and thyroid problems.
Analysts at the Resolution Foundation think tank said:"Even if the chancellor chooses to iron this temporary bill rise out, the cost of the EPG in 2023 to 24 will still have fallen by around two-thirds since last November." Yet, the Treasury will have to balance this against falling tax revenues from oil and gas producers and generators, which could lower its intake by £7bn.From December 2020: 'Energy price increases are killing people'The EPG is untargeted, with all households getting support irrespective of their income.
Some economists fear that this could increase inflation because households will have more money to spend on goods and services. It's a balancing act because in the short term lower energy bills will help dampen inflation. Some economists have suggested that it would be wiser for the government to offer more targeted support to poorer households to help mitigate against this risk.
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