UK plans loans to energy suppliers

LONDON: The UK government’s options to support people facing skyrocketing energy bills include providing energy supplier loans that could reduce bills by up to £500 ($587) a year, reported the Daily Telegraph newspaper yesterday.

Britain’s energy regulator said on Friday energy bills would rise by 80% to an average of £3,549 a year from October, prompting calls for urgent government support for households and businesses.

Finance Minister Nadhim Zahawi has prepared a range of government support options for the next prime minister, who takes office in early September, to consider, the Telegraph reported.

Zahawi told the Telegraph he was working on a plan to help energy suppliers with loans to provide them with greater liquidity in a move that could “put downward pressure on the price cap of no anywhere between (£400-500)”.

The idea, previously rejected, was now “back on the table”, reports the newspaper.

Wholesale price increases are passed on to UK consumers through a price cap, calculated every three months. Other options being worked out by the finance minister include freezing the price cap, increasing state benefits and a grant scheme for small businesses, the Telegraph said.

Zahawi said he fears that targeting aid only to those receiving state benefits would exclude others, including pensioners and middle-income earners, who will also likely struggle to pay. their bills.

Soaring energy bills, exacerbated by Russia’s invasion of Ukraine, have pushed UK inflation to its highest level in 40 years, but Britain’s response has been hampered by the race to replace of Prime Minister Boris Johnson which runs until September 5.

Liz Truss, the foreign secretary and favorite to replace Johnson, said she would consider doing more to help businesses cope with soaring energy costs if she becomes prime minister next month.

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