The recent plunge in wholesale gas prices means that utility prices for households may fall below the government’s price freeze in July. As a result, CPI inflation will be around 0.3 percentage points lower than we previously thought in the second half of this year and about 0.5 percentage points lower in 2024. What’s more, the government’s energy price subsidies may cost at least £10bn (0.4% of GDP) less than projected. That money could be used to get closer towards satisfying the pay demands of the unions that are currently striking and/or help achieve the Prime Minister’s aim of cutting NHS waiting lists.
Drop-Ins – The World In 2023 (10-11 January): Will 2023 be another rollercoaster year for economies and markets? Join our senior economists for these special briefings on 10th and 11th January to find out what to expect in the coming 12 months. Register now.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.