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To respond to the energy crisis, London continues to put its hands in its pocket. The British government announced on Wednesday September 21 that it would cover around half of companies’ energy bills. A measure which should apply during the next six months, while regulated energy prices have so far jumped 80% in the United Kingdom.
Faced with soaring energy prices, London is responding with subsidies. After a price cap for households, the British government announces that it has set a floor price for electricity and gas purchased by businesses this winter.
The difference will therefore be fully covered by the State. If the sum will depend on the contracts of each establishment, this could represent a reduction of more than 40% on the invoice.
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An additional burden for public finances
The objective is to prevent companies from collapsing, and to limit inflation which reached 9.9% over one year in August. This new support comes in a general context of lower taxes across the Channel. Liz Truss hopes to boost an economy on the verge of recession.
But these measures will weigh on public finances. Economists estimate these tax cuts and energy subsidies at 200 billion pounds. The Department of Energy and Business has already announced that this boost could be extended beyond winter.