FREEZING the energy price cap would require a “risky” amount of borrowing, Rishi Sunak has said. 

The Tory leadership candidate said he was “nervous” that it could make inflation worse. 

Energy regulator Ofgem is set to announce the price cap decision for October on Friday. 

Experts have already warned that the spike in wholesale energy prices could see it more than double the current limit of £1,971. 

Yesterday, the consultancy Auxilione predicted it would rise to £3,576 from October 1, before hitting £5,066 in January and £6,552 in April.

Labour, the SNP and the Lib Dems have all called for the cap to be frozen. Yesterday, Nicola Sturgeon said this level of intervention was necessary to “avoid a looming humanitarian disaster.”

However, such a move would be costly. 

Keith Anderson, chief executive of Scottish Power, has proposed capping household energy bills at about £2,000 a year, with suppliers covering the gap between the cap and the wholesale price of gas and electricity by borrowing from the government’s “deficit fund.”

The company estimate that such a policy would cost £100 billion.

Asked about freezing the cap, Mr Sunak told the BBC’s Today programme: “This is a challenge that is going to be with us for some time. And in that context, we need to make sure that what we’re doing is not only affordable but also isn’t going to make inflation worse.

“And at a time when we’re already borrowing an enormous amount of money, I think embarking on policies and programmes that add not just tens of billions, but tens and tens and tens and tens of billions of pounds on a permanent basis to our borrowing are risky, and that’s actually been a debate that we’ve had in this leadership race now.

“I think that is a gamble with people’s savings, with their pensions, with mortgage rates, in making inflation become more embedded, and that won’t help anybody if that happens, because inflation makes everybody poor. It’s pernicious.

“So, yes, I am nervous and sceptical about plans that are complacent about that risk.”

The former Chancellor is trailing his rival in the contest, Liz Truss, with recent polls suggesting her lead is now unassailable. 

However, Mr Sunak has insisted he could still triumph. 

During the interview, he stepped up his attack on the Foreign Secretary's plans to tackle the cost of living crisis through tax cuts. 

Mr Sunak said: “One thing is clear – there is a very clear difference of opinion in this leadership election, there is a difference of opinion in how you grip inflation and whether that’s a priority or not; there’s a difference of opinion about whether you prioritise – in my view – helping vulnerable people with the cost of living rather than giving tax cuts funded by borrowing to very large companies and relatively wealthy people.

“Those are big differences, and it’s right that we have a debate about them because they are going to shape the course of our nation over the coming months and years, so I think it’s important these ideas are debated.”

Defence minister James Heappey, a supporter of Ms Truss, said she was “in the business of cutting taxes”.

Asked on Times Radio whether people should be expecting to pay more in other taxes as a result of the Foreign Secretary’s pledge to reverse the rise in national insurance contributions, he said: “There’s definitely not any part of Liz’s body, as far as I can tell, that agrees with raising taxes.”

Ms Truss used Tuesday night’s leadership hustings in Birmingham to reject criticism of her tax-cutting plans.

“This whole language of ‘unfunded’ tax cuts implies the static model, the so-called abacus economics that the Treasury orthodoxy has promoted for years, but it hasn’t worked in our economy because what we have ended up with is high tax, high spending and low growth,” she said.