Home News UK to allocate £ 9bn to mitigate 54% increase in energy price...

UK to allocate £ 9bn to mitigate 54% increase in energy price impact

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Responding to record global gas prices, which have caused major problems for nearly 30 British energy suppliers, regulator Ofgem says the ceiling for the most used tariff will rise to £ 1,971 a year from April, the same month in which taxes will also increase.

The Bank of England also raised interest rates again on Thursday, saying inflation would soon exceed 7%, leading to one of the biggest cost-of-living crises in decades.

Finance Minister Rishi Sunak, whose financial support during the pandemic could reach £ 410 billion, said he had no choice but to step in to remove the “significant price shock” of some £ 22 million. households.

Charities and economists have said the impact of rising prices will be widespread, with low-income families unable to heat their homes properly and middle-income families being forced to cut spending elsewhere.

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To reduce the impact, the government will now provide state-guaranteed £ 200 loans to energy suppliers to spread the higher costs to consumers over five years in October.

A £ 150 reduction in local taxes will apply to about 80% of households in England.

European governments have spent tens of billions of euros trying to protect consumers from record energy prices, either by eliminating taxes or by supporting those most in need, after rising gas and energy costs and the reopening of economies. after restrictions imposed because of Covid-19.

In the UK, a six-month price cap has limited the immediate impact on consumers, forcing the impact on suppliers, more than 25 of whom have ceased operations in early 2021.

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Analysts believe that Sunak’s attempt to delay the full impact of rising consumer prices is a gamble, predicting that prices will remain high even after next year, Russia, Europe’s main gas supplier, is embroiled in a dispute with the West. on Ukraine.

The UK imports about half of its gas needs, and although European gas prices have fallen from record highs, they are still more than 300% higher than in the same period last year.

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