CBI says helping cash-strapped Brits won’t boost inflation

The head of Britain’s largest trade association has warned that tackling rising food and fuel bills will not boost inflation and the people “most affected” now need help.

Official figures released Wednesday reveal UK inflation soared to 9% in April, the highest in more than 40 years, as rising gas and electricity costs pushed household energy bills to record highs.

Tony Danker, managing director of the Confederation of British Industry (CBI), told BBC Radio 4’s Today programme: “Now you have to help the most affected.

“Helping people with heating and food bills does not increase inflation.

“You need to encourage business investment now – it won’t overheat the economy.

“As growth is coming soon, it will ensure that any setbacks in our destiny are short and shallow.”

The National Statistics Office said the 54% increase in the energy price cap in April, which brought the average annual gas and electricity bill closer to £2,000, was the main reason the consumer price index jumped from 7% in March.

Average gasoline prices rose to a record 161.8pa liters in April 2022, from 125.5pa the previous year. Diesel was another factor behind the 7% consumer price index increase in February after the average cost of pumps reached a record high of 176.1pa litres, which led to an average increase in motor fuels of 31.4% over the last 12 months.

Earlier, police minister Kit Malthouse said that while the government is “essentially opposed” to such a tariff, circumstances could warrant an unexpected tax on oil and gas giants.

The demand for a one-off tax on the energy sector, which has made huge profits with the rise in gas prices, is growing as the Labor Party says such a move is “inevitable”.

While Boris Johnson has repeatedly argued that an unexpected tax would force companies to abandon investments in local energy projects, Chancellor Rishi Sunak has reportedly asked Treasury officials to scrutinize his tax plans.

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Malthouse, a longtime ally of Johnson’s, told Times Radio: “We are fundamentally opposed to this type of taxation. We would like to see an investment model from this sector that will help us with our medium and long-term energy problems.

“But the chancellor reserves the right to take any steps he deems necessary, and I am sure he is always in talks with the industry.

“My general preference as a Conservative is to have low and stable and predictable taxes and retrospective taxation should be avoided, but there have been Conservative governments in the past that have felt the need for retroactive taxation and sometimes circumstances may warrant it. ”