A UK statistics body is reviewing how a lump sum of £400 that will be paid to domestic households to help cover energy bills will impact national inflation calculations.
In a statement today, the Office for National Statistics said it will consider whether the £11bn energy discount scheme “affects consumer price inflation statistics”.
The ONS said it will conclude its classification review of the Energy Bills Support Scheme this month.
The support scheme, which is expected to help 29 million households pay their energy bills, is part of a wider £37bn ‘cost-of-living' package that former chancellor Rishi Sunak unveiled in February.
Under the scheme, households will get a £66 monthly discount on their energy bills in October and November, rising to £67 until March 2023, the UK Department for Business, Energy and Industrial Strategy said earlier this year.
The ONS is examining whether the energy discount affects its calculations of the Consumer Prices Index, a measure of inflation that includes occupiers’ housing costs (CPIH), which estimates how much prices are increasing in housing and retail combined.
The CPIH—a measure of consumer inflation including costs related to housing — rose by 8.2% in the year through to June, up from 7.9% in May.
Rising costs of electricity, gas and other fuels were among the biggest contributors to the increase in the index, according to the ONS.
The statistics body will also evaluate whether the discount has any impact on broader measures of inflation such as the Consumer Prices Index, which the Bank of England predicts will exceed 13% this winter as gas prices soar, or the Retail Prices Index.
This may mean the ONS will seek to reduce national inflation figures by incorporating the energy discount.
If it finds that the upcoming energy discount affects the rate of inflation, for example by lowering housing costs, the ONS said it will “consider how the treatment can be consistently incorporated into those statistics”.
The statistical body will publish its update on the classification decision on 31 August.