Healey hints there could be more Budget help with 'punishing' energy bills - if you're on benefits - as he warns Britons he is preparing a 'tough' economic plan

John Healey today rolled the pitch for a 'tough' Budget in a fortnight as he hinted that he will provide only limited help for families with 'punishing' energy bills.The chancellor said any government assistance with bills would be 'targeted and temporary' as he was quizzed over fears that they could rise by as much as 20 per cent in January.A 4 per cent hike to Ofgem's energy price cap took effect from October 1 but forecasters warned they could go up by another £300 in the new year.When Mr Healey and Andy Burnham took over in Downing Street in July they temporarily removed the 5 per cent VAT rate on electricity bills until March 31 next year to cut payments by around £45 a year. But households still pay 5 per cent VAT for gas.Asked by ITV News at an International Monetary Fund (IMF) conference in Bangkok if more help was on the way, Mr Healey said: I am really conscious as everyone is whether they're in business or trying to make a household finances meet that energy costs are punishing at the moment.'We will do what we can in the budget both for business and for households to give people a bit of breathing space from some of the pressures.'But he added that the help would be 'as targeted as possible', sign that only the very worst off are likely to get assistance. The chancellor said any government assistance with bills would be 'targeted and temporary' as he was quizzed over fears that they could rise by as much as 20 per cent in January Mr Healey said: I am really conscious as everyone is whether they're in business or trying to make a household finances meet that energy costs are punishing at the moment'Mr Healey also signalled he would not give government departments more money to find pay rises for public sector workers. The Chancellor said the British people recognised the difficult nature of public finances due to ongoing global turmoil, and expected Government departments to 'manage with the budgets we've got'.He has reportedly rebuffed a request by Health Secretary Yvette Cooper for more cash to cover the costs of a pay deal for nurses, and told her to fund it out of the NHS's existing budget.This could have an impact on the delivery of frontline services within the NHS.Mr Healey and Mr Andy Burnham are facing a difficult prospect ahead of the October 28 Budget.They have promised to help households and businesses with the increased costs, driven up by the US's war with Iran, all while the same inflation continues to erode the Government's spending power and borrowing costs.Speaking to the BBC from the IMF meeting, Mr Healey was asked if the coming fiscal statement to the Commons would be a tough, or even an austere Budget.He replied: 'Well, it's a tough time. People can people can see the global economic conflicts, they know the pressure it's putting on them, they understand it's putting pressure on the Government.' The Chancellor was then pressed whether this meant that Government departments would see their budgets adjusted for inflation, to help meet pay commitments to workers like nurses and doctors.He replied: 'Look, I'll set out all the figures as you'd expect in two weeks' time at the Budget.'But people recognise these times that are tough for everyone, and what they do expect of a Government is to manage with the budgets we've got, deliver the public services they need, and that's the challenge for Government.'Our departments have the spending, and the Prime Minister and I being in lockstep about this.'Where we want to do things, we have to make sure that we can pay for them within the budgets that we've got and control spending, and that's part of the discipline.'That's part of the discipline that the IMF here in Bangkok this week has endorsed that they see in Britain, and perhaps want to see more from other countries too.'The IMF this week praised the UK for its steps to manage its budget deficit over the long-term, and said Britain was doing a good job at reducing this compared with other countries.The influential global economics body also said the UK was weathering the impacts of the Iran War better than had been expected, but warned inflation from the conflict was likely to get worse before it gets better.The UK economy reported surprise growth in August on the back of strong factory production, according to official figures released today.Nevertheless, it represented a slowdown after stronger activity earlier in the summer.The Office for National Statistics reported that gross domestic product (GDP) increased by 0.1 per cent in August, following 0.4 per cent growth in July.The statistics body also said the economy grew by 0.4 per cent in June, revising its previous prediction of 0.3 per cent upwards.The August reading surpassed the expectations of economists, who had pointed to a 0.1 per cent decline for the month.Data showed that the economy grew by 0.7 per cent over the three months to August.This followed a growth of 0.5 per cent in the three months to July, and a growth of 0.5 per cent in the three months to June.