The Prime Minister of United Kingdom, Liz Trussannounced on Thursday that the government will introduce a two-year “energy price guarantee”, explaining that a typical household will pay no more than £2,500 a year in energy bills. He explained that the guarantee replaces the price limit of the Office of Gas and Electricity Markets (OFGEM). Truss affirmed that they will obtain the price guarantee for two years, guaranteeing the wholesale price of energy.
“We will support all businesses, charities and public sector bodies with energy costs for 6 months,” the prime minister said. She added that vulnerable sectors, including hospitality, will have longer support. “The energy bills are going to be affordable, we are not going to give in to requests for an unexpected tax,” she said.
According to government estimates, they expect intervention in the energy sector to curb peak inflation by up to 5 percentage points.
He also announced a joint plan between the Treasury and the Bank of England to meet the extraordinary liquidity needs of energy companies, for a value of 40,000 million pounds.
The pound rose in the market after the announcements moderately. GBP/USD is recovering from years low and is trading near 1.1550.
Source: Fx Street
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