Inflation boost from Grid payouts

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The Independent Online
Inflation boost from Grid payouts

The one-off pounds 50 rebate on electricity bills resulting from the flotation of the National Grid would reduce the Retail Price Index by 1.0-1.5 percentage points in the first quarter of next year, according to the Central Statistical Office. The index would then bounce back by the same amount in the second quarter. The rebate will cut first quarter electricity bills in England and Wales by 60 per cent, the statisticians said. The CSO emphasised that these were approximate estimates. The precise effect would depend on timing of the rebates and on how much the weighting of electricity in the RPI is changed in February. Don Smith, an economist at HSBC Markets, said the temporary dip in inflation could help limit pay rises in January, the busiest month of the year for settlements.

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