When the next prime minister is installed in Downing Street on Monday, we can expect a package of initiatives to help households with their heating bills. But will Rishi Sunak’s existing scheme – which promised £400 worth of handouts to every household – survive if, as expected, Liz Truss walks into No. 10? The scheme has already been heavily criticised because it is not means-tested and fails to target help towards the poorest.
But this morning came bad news: the Office for National Statistics has decided to treat the £400 handout as extra income, not as a reduction in bills as was intended. This matters because it means the scheme will not help to reduce inflation. Had the ONS instead decided that the handouts would constitute a reduction in prices then it would, according to Deutsche Bank, have helped to shave 2.7 per cent off RPI, which currently stands at 12.3
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