New Prime Minister Liz Truss is expected to unveil plans to cap energy bills in the UK on Thursday, a move that the government is expected to borrow at least £100 billion to fund.
Truss, who took office earlier this week after winning the Conservative leadership election to succeed Boris Johnson, is under pressure to provide new financial support for Britons facing soaring heating bills and food prices, and the Bank of England is forecasting a recession in 2023.
The government will likely cap household energy bills at around £2,500 a year, with businesses in line to receive a support package. However, funding the measure through new borrowing will likely lead to income tax rises.
The opposition Labour party has called for the measures to be part-funded by a windfall tax on energy companies, with party leader Keir Starmer telling Truss on Wednesday that energy producers will make £170bn in additional profits over the next two years.
The typical household gas and electricity bill is due to rise from £1,971 to £3,549 in October. Boris Johnson’s government had previously announced that households would receive a £400 subsidy on their heating bills over the next six months.