Liz Truss Is Likely To Reveal Plans To Limit Energy Bill Increases

On Thursday, new Prime Minister Liz Truss will unveil plans to limit energy bill increases, spending billions to protect consumers from rising prices. Typical household energy bills could be capped at around £2,500 per year, with businesses also likely to benefit. It is unclear how long the assistance will last, but the government is expected to borrow at least £100 billion to cover the costs.

The average household's annual gas and electricity bill is currently set to rise from £1,971 to £3,549 in October. Experts and charities have warned that if people cannot afford basic day-to-day living expenses, their lives will be put at risk this winter.

However, according to the End Fuel Poverty Coalition, if the energy price cap is frozen at £2,500, 6.9 million UK households will still be in fuel poverty this winter, up from 4.6 million last winter. The recent increase in consumer bills follows sharp increases in wholesale gas prices, largely as a result of the conflict in Ukraine, which has reduced Russian gas supplies.

Ms. Truss said ahead of the announcement that she knew families and businesses were concerned about "how they are going to make ends meet this autumn and winter".

"Putin's war in Ukraine and weaponization of Europe's gas supply is causing global prices to rise - and this has only highlighted the need to strengthen our long-term energy security and supply," she stated. She promised to "tackle the root cause of these problems, so that we are not in this position again".

The government is expected to compensate energy firms for the difference between the wholesale price for gas and electricity they pay and the amount they can charge customers in order to limit the amount customers' bills rise.