According to the IFS, the government would have to pay an extra £14bn to maintain its existing support package for households in light of the latest price cap rise.
Today’s rise will add £490 to a typical household’s energy bill over the period October to December compared to what it would have been if prices had not changed.
In May, the Government announced a support package that represented around three quarters of the expected increase in energy costs during the year. But this will now only cover 47% of the increase.
The IFS has calculated that covering the same proportion of the bill rise expected in May would now cost £14 billion.
IFS Research Economist Isaac Delestre said:
The new energy price cap means typical bills this financial year will be 27% higher than predicted when the last support package was announced in May.
Sunak has proposed additional spending and tax cuts that would cover a substantial portion of rising energy costs for next winter.
Ms Truss has proposed a green tax freeze that would have only a modest effect on household bills, but has so far been less clear about the scale and nature of the direct support it would provide.
Looking beyond this winter, energy prices also look set to remain very high well into next year, putting pressure on the government to provide more support in the coming months.
Whoever becomes the next prime minister will likely announce a major support package very soon after taking office.