If this happens then the impact of raising the EPG level on energy bills will last only a few months – months in which the seasonal drop in energy use will considerably soften the budgetary impact for households. On the other hand, the most recent forecasts suggest that consumer energy prices are set to fall below the EPG level from this summer.In addition, the last instalment of the £400 reduction from energy bills is set to be paid in March. The Energy Price Guarantee (EPG) is planned to rise from £2,500 to £3,000 per year for a typical household in April.As a share of total spending, the lowest-income households are almost three times as exposed to energy costs as the highest-income households. High inflation has hit lower-income households hardest, mostly because of the sharp increases in gas and electricity prices.This short report analyses the latest outlook for inflation, how this varies across households and is impacted by the government’s interventions on consumer energy prices, and the resulting effects on real earnings and benefit levels. As such it continues to be the backdrop behind many of the most pressing issues that will face Chancellor Hunt when he delivers his first Budget on 15 March. The recent surge in inflation, driven by spectacular increases in energy prices, has driven sharp falls in household living standards, huge government intervention to try to mitigate it, and serious policy headaches.

Percentage of theâ‹ household's budget