Mon | Sep 26, 2022

UK government caps energy bills for businesses for six months

Published:Wednesday | September 21, 2022 | 2:04 PM
British Prime Minister Liz Truss arrives to meet Japan's Prime Minister Fumio Kishida for a lunch bilateral in New York, Tuesday, September 20, 2022. (Toby Melville/Pool Photo via AP)

LONDON (AP) — Britain's government said Wednesday it will cap wholesale energy bills for businesses this winter to ensure companies don't go bust amid soaring energy prices.

Authorities said the government will pick up nearly half of all business energy bills for six months starting October 1 to ensure companies “are able to get through this winter.”

“We're going to review it after six months. We'll make sure that the most vulnerable businesses like pubs, like shops, continue to be supported after that,” said Prime Minister Liz Truss, who is in New York to attend the United Nations General Assembly.

UK Treasury chief Kwasi Kwarteng said the government measures would “stop businesses collapsing, protect jobs and limit inflation,” though critics predicted it would lead to higher interest rates and government debt.

Officials have not provided details on how much the support package will cost, but it is expected to run to billions of pounds (dollars).

Accountancy firm PwC estimated the measure to help businesses could cost from 10 to 20 billion pounds.

The news followed similar measures announced earlier this month to cap domestic energy prices to help millions of people heat their homes amid a cost-of-living crisis.

Spiralling gas and electricity bills, together with steeply rising food costs, have driven inflation in the UK to its highest level in decades. The Bank of England expects the economy to go into a recession next year.

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