Council tax rebate LIVE: Rishi INSISTS energy price cap relief ‘right thing to do’ amid bill boost for low-income homes

How can I watch Rishi Sunak's speech today?

The Sun will be streaming Mr Sunak's speech later today.

Be sure to check the website to tune in.

Will council tax rise?

 It's safe to say your council tax is likely to go up by around 2.5 to 3%.

That's because ministers are set to allow councils to charge a 2% increase - that's on top of a 1% hike that will fund social care.

Hargreaves Lansdown senior personal finance analyst Sarah Coles told The Sun: "It will be up to individual councils how much they take advantage of this, but there’s a strong likelihood that many of them will.

"They’re wrestling with the enormous rise in the cost of social care, so they may well raise council tax as much as they possibly can."

Energy bill rebate

Mr Sunak is also expected to reveal plans to dish out £200 rebates on their energy bills.

It is effectively a discount on energy bills, which are set to soar by £600 as the price is cap is raised from £1,200 to near £2,000.

Ministers will underwrite the loans, which will be paid to customers buy providers and then recouped over time.

The "rebate and clawback" scheme will ease the pressure on bill-payers in the short term - but customers will have to pay back the cash eventually.

What will Rishi Sunak announce on energy prices?

He is expected to unveil financial support for struggling families bracing for a devastating squeeze come April.

This will likely be in the form of state-backed loans, giving all households a £200 discount off their energy bills.

This could increase to £500 for those struggling the most.

Mr Sunak may give hard-up households in Council Tax bands A to C rebates.

These would be funded by government grants under targeted measures for poorer Brits.

Council tax cuts

Mr Sunak is expected to slash council tax bills for struggling Brits to help offset soaring bills.

Those in council tax bands A to D will likely receive rebates on their payments, funded with government grants.

The Chancellor - who will fork out about £9billion for the move - is expected to lay out plans for more than 15 million of the poorest households to receive the rebate.

It is expected around £150 will be knocked off people's council tax, with Mr Sunak due to flesh out plans to Parliament at 11am.

What is happening today?

Timings to keep an eye on today:

• 11AM - Ofgem will announce the new energy price cap which will take effect in April.
• Not long after - Chancellor Rishi Sunak will set out how the government plans to help households with the cost of that price hike
• Midday - The Bank of England will announce whether the cost of borrowing will get more expensive as they announce their interest rate decision.

What time is Chancellor’s energy price hike speech today?

Energy regulator Ofgem is expected to reveal the new energy price cap for average dual-fuel bills at 11am today, February 3, 2022.

It is anticipated to rise by up to 50 per cent, meaning the average bill could hit almost £2,000 a year.

Mr Sunak's speech will take place following the announcement at 5pm.

Does the energy price cap save you money?

Ofgem sets the price cap twice a year, each for a six-month period.

For example, suppliers were only able to charge up to £1,138 on their default tariffs between April and September 2021 based on a cap that was announced in February last year.

The energy regulator then announced in August that the price cap would rise by £139 from October 1 to £1,277 - the highest since the cap launched in January 2019.

This cap lasts until the end of March 2022, when a new limit will come into force from April.It means your costs actually rise if you are on a default deal.

It is usually possible to save money by shopping around, but this is unlikely to be an option for 2022 as energy prices soar.

Rates are rising across the board at the moment as all suppliers are hit by rising gas prices and increased demand.

Energy price cap started in 2019

The energy cap was introduced in January 2019 and is set by industry regulator Ofgem to ensure customers aren't ripped off when their contracts end.

It sets a limit on how much suppliers can charge for out-of-contract or default energy deals based on factors such as wholesale energy market costs.

The total savings for individual customers will depend on how much energy they use, the price of their current tariff, whether they have both gas and electricity and how they pay for their energy.

Interest rates expected to increase

The Bank of England will update its forecasts today and is expected to hike interest rates by at least 0.25 per cent to 0.5 per cent.

But some economists have called for an increase to 0.75 per cent to tackle spiralling inflation which could hit six per cent by April.

Yesterday annual shop price inflation jumped from 0.8 per cent in December to 1.5 per cent in January, according to the latest BRC-NielsenIQ shop price index.

It said the increase was at its highest rate since 2012. Food price inflation rose from 2.4 per cent in December to 2.7 per cent in January, as price rises reached the highest rate since October 2013.

Non-food inflation rose to 0.9 per cent in January compared to 0.2 per cent in December.

Warm Homes Discount could be extended

In a bid to stop the poorest Brits choosing between heating and eating, Rishi is also expected to extend the Warm Homes Discount too.

The Treasury is expected to announce a £150 rebate on council tax for everyone on bands A to D - costing the Exchequer at least £9billion - as an extra measure of support for those on the lowest incomes.

Last night critics rounded on the plans, which were still being ironed out yesterday, saying the help was just a drop in the ocean for millions of families.

One Tory minister admitted last night: “Whatever the plan is, it just won’t cover the whole rise.”

Petrol prices also expected to rise

Pump prices are expected to rise again soon as the cost of crude oil sticks at around $90 a barrel, a seven-year high. It means the costs of petrol and diesel have risen by 26.8 per cent in a year.

Given that the average household spends £22.30 per week on fuel, that means an extra £5.98 a week, or £311 a year. RAC fuel spokesman Simon Williams warned yesterday: “Storm clouds are gathering, however.

"With oil now having traded above $90 for a week – the highest price for more than seven years — wholesale fuel costs are once again increasing, which will undoubtedly lead to retailers putting up forecourt prices.

“Our message to the biggest retailers, which lead the market, is to treat drivers with respect by fairly reflecting the movement in the wholesale fuel market and not taking overly high margins.”

"Rebate and Repay" scheme

Under pressure to scrap VAT on energy bills, Rishi Sunak will today announce a series of measures to try to ease the pain for hard-pressed families.

He will lay out a major “Rebate and Repay” scheme to give every household in the country cash back.

Ministers will underwrite billions of pounds worth of loans to energy firms to dish out to their customers — to be recouped over time.

The so-called “smoothing” mechanism will mean Brits pay less now when prices are high, but face paying back huge sums over several years.

And the winter scheme may only be extended from the end of the year, leaving months of pain for struggling households.

Planned rise on April 1st

Households face a planned rise on National Insurance, council tax hikes and higher energy bills from April 1.

Soaring inflation is adding £180 a year to grocery bills and soaring crude oil prices are pushing up prices at the pumps.

Energy watchdog Ofgem was forced to bring forward its planned price cap rise on gas and electric bills to today, as the government scrambles to help Brits with the cost of living crisis.

Suppliers will be allowed to hike the basic tariff for 22 million households, meaning families are set for huge increases in bills.

'Millions are waking up to the reality of huge energy price rise'

Consumer expert Martyn James said: “It’s going to be Black Thursday. Millions of households across the UK are waking up to the reality of huge energy price rise hits, while inflation inches ever up and all the main bills we pay look set to rise.

“Whatever you do, don’t panic - there is help out there. But the Government need to know that it’s nowhere near enough for millions of hard-up people.”

Brits to be hit hard

Brits face a triple-whammy of...

• Average gas and electric bills hitting £2,000 a year as the Government's price cap is raised.
• Mortgage payments going up as interest rates set to double from 0.25 per cent to 0.5 per cent - the second increase in two months.
• Shoppers hit by the highest price rises in nearly a decade
• Petrol prices to rocket to record levels.

Rishi Sunak set to unveil emergency package

Rishi Sunak will head to the Commons this morning to unveil an emergency package to help the most hard-up.

The Chancellor is expected to give everyone £200 off their energy bills and slash council tax on band A-C households by hundreds more.