6m households to have savings wiped out after energy price cap surge – live updates

The Government would have to pay an additional £14bn to maintain its existing support package for households in light of the latest increase in the price cap, according to the IFS.

Today’s increase will add £490 for a typical household’s energy bill over the period October to December relative to what would have happened if prices were unchanged.

In May, the Government announced a support package that represented around three-quarters of the expected rise in energy costs over the year. But that will now only cover 47pc of the increase.

The IFS has calculated that covering the same proportion of the increase in bills as intended back in May would now cost a further £14bn.

Isaac Delestre, research economist at the IFS, said:

The new energy price cap means that typical bills for this financial year will be 27pc higher than what had been expected when the last support package was announced in May.

Mr Sunak has proposed additional spending, and tax cuts, that would cover a substantial portion of the increase in energy costs for the coming winter.

Ms Truss has proposed a suspension of green levies that would have only a modest effect on household bills, but has so far been less clear on the scale of and nature of direct support she would provide.

Looking beyond this winter, energy prices also look like they will remain very high well into next year, which will put pressure on the government to provide further support in the coming months.

Whoever becomes the next prime minister will most likely be announcing a substantial package of support very soon after taking office.