BoE's Pill: The new PM's energy bills support could bring inflation down

No guarantee to prevent further rate hikes

The new prime minister’s plans to freeze energy bills for households and businesses could help lower inflation in the short-term, the Bank of England’s chief economist Huw Pill said this morning (7 September).

Pill's remarks to the Treasury committee come amid numerous reports that Liz Truss is set to announce plans to place a cap on wholesale energy costs, effectively cancelling further hikes to gas and electricity bills. "One of the things that does seem to be under consideration is a change to the relationship between gas prices and retail gas prices in a direction that will lower headline inflation, relative to what we were forecasting, where that relationship was based on the mechanics of the Ofgem price gap," he said.  "So I think that in the short term it would tend to weigh on infla...