Sunak to announce support with energy price cap set to soar

The Chancellor is expected to make an announcement after Ofgem details the hike to the price cap.

Energy bills are expected to soar (Danny Lawson/PA) (PA Wire)

Chancellor Rishi Sunak will announce support to ease the pressure on millions of households facing soaring energy bills.

Ofgem is expected to announce on Thursday that the energy price cap is to rise by 50% because of soaring wholesale gas prices, meaning the average bill could hit £1,915.

According to the Times, Mr Sunak will commit to giving households in council tax bands A to C rebates funded by Government grants under targeted measures for poorer households.

The Treasury did not rule out the move nor did it deny that the Chancellor could announce state-backed loans to give all homes a discount on their energy bills of £200.

Boris Johnson is under vast pressure to ease the cost-of-living crisis, with his leadership under threat over No 10 parties, but the new support is unlikely to be enough to prevent energy bills rising significantly for most people.

Also on Thursday, the Bank of England is widely expected to raise interest rates from 0.25% to 0.5% with its forecasts likely to show rampant inflation this spring.

Expert analysis suggests Ofgem’s review of the price cap, which will affect around 22 million households, will see bills soar by 50%.

The rise will come into force from April 1, when the price cap on energy bills is updated for the next six months.

The energy regulator’s announcement had been scheduled for Monday but officials, without stating why, decided to move it to 11am on Thursday.

Asked about the new support package, a Government spokeswoman said: “We recognise people are facing pressures with the cost of living, which is why we are providing support worth around £12 billion this financial year and next.

“We will provide an update in due course on further help for households across the UK to meet their energy costs in the face of rising global gas prices.”