Closing summary
Falling petrol prices pushed Britain’s inflation rate back below 10% in August in the first easing of upward pressure on the cost of living in almost a year.
The consumer prices index – the government’s preferred measure of inflation – dipped from 10.1% in July to 9.9% last month, with cheaper motoring costs more than offsetting the impact of dearer food.
Despite the better-than-expected figure, the Bank of England is still expected to raise interest rates by 0.5 points when its monetary policy committee meets next week.
Our analysis:
The EU expects to raise €140bn from windfall taxes on energy company profits to “cushion the blow” of the energy crisis, report Jennifer Rankin in Brussels and Alex Lawson in London.
The emergency levy will be placed on oil, gas and coal firms alongside a separate measure to cap revenues from renewable electricity generators at less than half of current market prices.
Our other main stories today:
Looks like the government has responded – it will confirm further details of a support scheme for businesses struggling with energy bills next week, with a promise to backdate that help in October if it faces delays.
The prime minister’s official spokesman said that the government “will confirm further details of the business support scheme next week”. Businesses have in recent days expressed concern about having to wait longer than households for help on soaring energy costs. The spokesman said:
We will confirm further details of the business support scheme next week.
The scheme will support businesses with their October energy bills and that includes through backdating if necessary.
Thank you for reading. We’ll be back tomorrow. Take care! – JK
Updated
Our acting deputy Money editor Zoe Wood has spoken to a family about the impact rising living costs are having on them.
“Winter is our big fear at the moment because we don’t know exactly how it’s going to shake out. All we know is we’re basically going to be skint,” says Dan Collins.
Collins and his partner, Lucy Woolhead, welcomed identical twins Scarlett and Beatrix in February and their short lives have been in step with the cost of living crisis. While official figures published on Wednesday showed runaway inflation dipped below 10% last month, as lower petrol and diesel prices offset dearer food, Sarah Coles of the analysts Hargreaves Lansdown said this was just a “pause for breath”.
Coles said motoring costs were more of a concern for those on higher incomes, and low earners remained under pressure. “Those on the lowest incomes, who are suffering the most as a result of rising prices, are still facing impossible energy bills and horrible hikes in the cost of food,” she said.
