2 2GM Saturday May 28 2022 | the times
News
Interest rates could hit 3 per cent next
year as the chancellor’s spending plans
put pressure on the Bank of England to
control inflation, economists said.
There are expectations in the City
that the Bank will be forced to raise
rates again after Rishi Sunak
announced a £21 billion package of
policies to help households pay for cost
of living rises.
Inflation hit a 40-year high of 9 per
cent in April, with energy bills set to
have more than doubled in a year by
October when the average yearly bill
will reach £2,800.
Paul Johnson, director of the Insti-
tute for Fiscal Studies, said the meas-
ures were “strikingly redistributive” in
favour of the poorest households. How-
ever, “pouring additional money into
an economy suffering from exception-
ally high inflation to which the Bank of
England is responding with interest
rate rises certainly comes with some
risk”, he added.
Experts at the Capital Economics
consultancy said that the measuresInterest rates could go to
3%, economists predict
Arthi Nachiappan
Economics Correspondentwould put pressure on the Bank to raise
interest rates “into restrictive territory”.
Paul Dales, chief UK economist, said:
“We’re becoming more confident in our
view that interest rates will rise from
1 per cent now to 3 per cent next year.”
Dales added that, although he ex-
pected the Bank of England to raise
rates by 0.25 percentage points at its
next meeting in mid-June, it was be-
coming increasingly likely that its rate-
setting committee would vote to in-
crease them by 0.5 percentage points in
one go.
The giveaways to those on means-
tested benefits will not fuel inflation,
but the universal giveaway of £
could, according to Simon French, chief
economist at Panmure Gordon.
Three members of the Bank’s rate-
setting committee voted for a 0.5 per-
centage point rise in interest rates to
1.25 per cent earlier this month, but
were outvoted in favour of a rise to 1 per
cent. It is the fourth consecutive rate
rise in as many meetings after the Bank
became the first of the world’s biggest
central banks to increase the cost of
borrowing from its historic low of
0.1 per cent in December.Free electric
blankets from
energy giant
Emily Gosden Energy EditorEnergy bills could be cut by a fifth by
using an electric blanket to keep warm,
one of the big energy suppliers has said.
Octopus Energy has sent 7,000 free
electric blankets to customers in finan-
cial hardship since January and moni-
tored their electricity consumption via
smart meter. It found that customers
who received the blankets had reduced
their energy usage by 19 per cent com-
pared with other customers — a saving
equivalent to about £300 this year.
Octopus is Britain’s fourth-biggest
energy supplier, with more than three
million customers. The company said:
“It currently costs less than 3p an hour
to keep a person warm with an electric
blanket, whilst heating a whole home
could cost around £4.70 a day.”
Energy bills leapt to an average of
£1,971 a year from April and are likely to
increase to £2,800 a year from October.
Other energy companies have been
criticised for offering insensitive tips.
Eon apologised after posting socks to
customers and Ovo suggested people
could cuddle their pets to keep warm.Benefit claimants and pensioners are
set to receive the biggest rise in their
incomes since 1991 in a move that will
cost the Treasury £15 billion next year.
The sum will keep benefit payments
and pensions in line with inflation. The
consumer prices index rose by 9 per
cent in the 12 months to April, meaning
that welfare recipients and pensioners
face a real-terms cut this year after their
payments increased by only 3.1 per cent.
Rishi Sunak, the chancellor, said the
Treasury would raise the payments in
line with inflation next year after
previously blaming the government’s
computer systems for his inability to
provide more immediate support.
The Resolution Foundation, an
independent think tank, has calculated
that the cost would be about £15 billion.
“What is likely to happen is that
benefits and pensions next year will go
up by this year’s much higher inflation
levels,” Sunak told BBC Breakfast.
“That is forecast to be much higher
than the inflation that people willPensions and benefits to get
biggest rise for over 30 years
George Grylls, James Beal actually experience next year. So, for all
those people, they can look at next year
and actually feel relatively confident
about that.”
As part of Sunak’s separate £21 billion
package of measures announced this
week, pensioners will receive a top-up
to their annual £200-£300 winter fuel
payment in November and six million
people on disability benefits will get a
one-off payment of £150 in September.
Yesterday Boris Johnson admitted
that the package, which is partly funded
by borrowing and partly by a windfall
tax, was not an immediate solution.
“What we are doing now is making
sure we support people through tough
times,” he said in an interview with
Bloomberg TV. “I’m not going to
pretend that this is going to fix every-
thing for everybody immediately.”
Sunak announced on Thursday that
all households would receive an auto-
matic discount of £400 on their energy
bills. Yesterday he refused to rule out
more spending to ease the cost of living
crisis but promised not to leave a legacy
of debt for the country’s children. Thechancellor defended himself as a “fiscal
conservative” as Tories were divided
over his £21 billion package. The
chancellor said it was right to act when
families were facing “acute distress”.
The head of a fuel poverty charity
said that some people planned to follow
Sunak and give their rebate away to
help those in desperate circumstances.
Adam Scorer, the chief executive of
National Energy Action, said: “We’ve
already got people willing to donate
some of the money when they get it. We
are being clear with people: they need
to make sure they can afford to donate
it first. The last thing we want to do is to
take cash off people who might need it.
But we saw the same with the council
tax rebate. When people thought
they didn’t need it themselves, they
donated it.”
No 10 did not respond to questions
about what Johnson would do with the
rebate for the £1.2 million house he
owns with his wife, Carrie, in Camber-
well, southeast London.
At last, substance is triumphing
over style, Matthew Parris, page 29females. I would extend that to school
uniforms personally. I think the law
allows schools to do that.”
A survey of health authorities
recently found that children in some
parts of England were up to three times
more likely to be referred for gender
hormone treatment.
“You can see that by huge disparities
around the country,” Braverman said.
“Some parts of the country there are
very low rates of children presenting as
transgender, in some parts of the
country it’s quite worryingly high. That
must be to do with the way teachers and
local education authorities are ap-
proaching this subject. I think there is
something to be said for young people
seeing what their peers are doing and
being influenced by that.
“Medical professionals, teachers,
should be taking a much firmer line.They shouldn’t take an unquestioning
approach, they shouldn’t just take what
the child says. There could be a whole
host of other causes to why that child
might be coming forward.”
She said that she supported a deci-
sion by the Girls’ Day School Trust for
the 25 independent schools it repre-
sents not to admit boys who identified
as girls, protecting their status as single-
sex institutions. She said: “I think the
Girls’ Day School Trust is right in its
position to say that we are a girls’
school, and for that reason male child-
ren will not be admissible.”
Referring to the case of an 18-year-
old pupil who has said that she was
forced out of her school in a trans-
phobia row, Braverman said: “Whether
it’s a pupil, a parent or a teacher, not to
be able to question someone’s assertion
that they are transgender is I think out-
rageous.”
In a separate interview with The
Times, the Archbishop of Canterburysaid that a woman was “someone who is
sexually a woman, who is born and
identifies as a woman or who has
transitioned”.
The Most Rev Justin Welby said
there was a difference between “how
you identify a woman and how you
ensure that trans people are valued and
cared for in exactly the same way as
every other human being”.
He said: “They’re not less, they have
their particular challenges, every
human being has their particular chal-
lenges. But we can’t get away from the
science. We’ve got to start there.”
The hounding of Rowling for her
views on the subject was “wrong” he
said. “It’s fine to disagree vehemently
but not abusively... The culture wars
approach is where we end up in the
greatest trouble.”continued from page 1
Trans advice to teachers‘Rowling is a heroine. Very brave,’
Suella Braverman, page 8
‘The suggestion I should not be political^
is nonsense,’ Justin Welby, pages 40-If a section of your Times is missing, please call 020-7711 1525 or e-mail
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e-mail [email protected]16,000 parties
for the jubilee
Britain will throw
more than 16,
street parties to
celebrate the Queen’s
Platinum Jubilee over
the bank holiday
weekend, a poll has
predicted. Page 17More Britons go
private for GPsJohnson would
lose seat in poll
Boris Johnson would
lose his constituency if
an election were held
tomorrow, according
to a poll that suggests
his party would be
annihilated in its red
wall seats. Page 6
Musk accused
on Twitter stake
America’s senior
financial regulator has
told Elon Musk that it
believes he breached
market rules by failing
to swiftly disclose his
$2.6 billion investment
in Twitter. Page 51Starmer named
in tribunal case
Sir Keir Starmer took
no action after being
warned about claims
that a Labour MP was
bullying a staff
member, an
employment tribunal
has been told. Page 23
FOLLOW US
thetimes timesandsundaytimes thetimesThe number of people
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Times polling shows, as
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LEADING ARTICLES 33REGISTER 82
CROSSWORD 87TV & RADIO
SATURDAY REVIEWUvalde police
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Police waited nearly an
hour to confront the
Uvalde school gunman
because they thought
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risk, it has emerged.
Two teachers and 19
children died. Page 48THE WEATHER
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