Families could now face average energy bills of up to £5,000 from April after Chancellor Jeremy Hunt ripped up the government's entire economic strategy yesterday.

He said that the energy price guarantee which limits average energy bills to £2,500, will now last for six months rather than two years, and come to an end in April.

Support will then be targeted at the most vulnerable in a move that could see bills for most families double.

He also reversed £32billion worth of tax cuts from Prime Minister Liz Truss’s disastrous mini-budget in an attempt to reassure the markets, including the 1p cut in the basic rate of income tax, which has been shelved “indefinitely”.

'Sorry'

On Monday night, she said sorry for the first time for “mistakes” in economic policy but vowed to fight on, telling the BBC: “I will lead the Conservatives into the next general election.

“First of all, I do want to accept responsibility and say sorry for the mistakes that have been made. I wanted to act, to help people with their energy bills, to deal with the issue of high taxes, but we went too far and too fast. I have acknowledged that.

“I have put in place a new Chancellor with a new strategy to restore economic stability. Now what I am focused on is delivering for the public.”

'Difficult decisions'

Mr Hunt denied that “austerity 2.0” would be imposed, but think tanks have told The Telegraph that spending cuts worth tens of billions of pounds were still needed to balance the books.

He told the Commons: “We are a country that funds our promises and pays our debts and when that is questioned, as it has been, this Government will take the difficult decisions necessary to ensure there is trust and confidence in our national finances. That means decisions of eye-watering difficulty.

“But I give the House and the public this assurance – every single one of those decisions, whether reductions in spending or increases in tax, will be shaped through core compassionate conservative values that will prioritise the needs of the most vulnerable.”

How high could bills go in April?

The Times says that Ofgem, the regulator, has yet to set a cap for April amid uncertainty about what will happen to the wholesale cost of gas.

However, the consultancy Auxilione forecasts that average bills could hit £5,078.

RBC Capital Markets predicts £4,684 a year, the Resolution Foundation £4,000 and Investec £3,923.

More like this…

View all