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.
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