Paul Dales, chief UK economist at Capital Economics, said this could determine how consumers react to higher prices. “People just have less money to spend on other items,” he said. “If you’re in a situation where you’ve got some savings — or you were saving — then you can just choose to save less and carry on spending. But a lot of people aren’t in that situation, so they just have to cut back on other things.” Dales said the prospect of higher bills could force people to cut back immediately. That could slow down the economy, as consumer spending contributes two thirds of Britain’s GDP.