**FAQs:**

**1. How did fossil fuel prices impact inflation?**
Fossil fuel prices were the primary factor in the recent spike of inflation, with energy-price effects accounting for three-quarters of the consumer price index inflation in the 12 months leading up to February 2023.

**2. How can the Bank of England better protect against inflation and lower energy bills?**
One recommendation is for the Bank of England to implement a temporary Term Funding Scheme for Energy Price Stability (TFSEPS), which would provide lower interest rates to encourage clean energy loans. This would help increase clean energy supply, reduce the demand for fossil fuels, and stabilize energy prices.

**3. How could lower interest rates for renewables and grid upgrades result in savings for consumers?**
A decrease in interest rates for renewables and grid upgrades in the years 2026-30 could lead to significant savings in system-wide electricity costs, potentially saving households £24 per year (in 2024 prices).

**Conclusion:**

It is evident that fossil fuel prices have a significant impact on inflation and the cost of living for consumers. By implementing innovative policies such as the Term Funding Scheme for Energy Price Stability (TFSEPS), the Bank of England can play a crucial role in helping to lower energy bills and protect against inflation. By promoting clean energy investments and reducing reliance on fossil fuels, the economy can be better equipped to withstand price shocks and create a more sustainable future for all.