Sunak insists energy handouts will not stoke inflation

Good morning. 

All eyes are on Rishi Sunak this morning as we digest the latest measures to help battle the cost-of-living crisis.

Paul Johnson, director of the IFS, has warned there’s a risk inflation could be driven even higher if the Chancellor gives in to the temptation of offering more and more handouts.

He told BBC Radio 4: “In general when you’ve got very high inflation you need to be very careful about putting more money into the economy. 

“I think the biggest risk here is that the Chancellor will be tempted to do this again and again and I think if that happens then we really could be in for a bit of trouble.”

It comes after the Chancellor unveiled a £15bn package of measures to help households cope with surging energy bills, which will be funded in part by a windfall tax on oil and gas profits.

5 things to start your day 

1) How midlife ‘peakers’ are resisting the return to the office  London has effectively become the home working capital of the world 

2) BP to review all North Sea investment in light of windfall tax  Oil giant previously said it would go ahead with its £18bn planned investment for the area regardless of an extra levy

3) Used car shortages to last until 2024, warns Auto Trader  Short supply of second-hand vehicles is driving up prices

4) Missguided on brink of collapse  Fashion chain accused of leaving suppliers millions of pounds out of pocket

5) Fears of French broadband takeover as billionaire’s BT stake sparks national security review  Business Secretary Kwasi Kwarteng orders review before a potential takeover

What happened overnight 

Hong Kong shares rallied more than 3pc on Friday morning thanks to a surge in tech firms after strong earnings from Alibaba and Baidu. Shanghai, Tokyo, Seoul, Sydney, Singapore, Taipei, Manila, Jakarta and Wellington were also sharply higher. 

Coming up today

• Corporate: Worldwide Healthcare Trust (full-year results)
• Economics: Core personal consumption expenditures (US), personal income (US), Michigan consumer sentiment index (US)