Monday, June 5, 2023
HomeEconomyNew UK leader Liz Truss finalises huge electricity subsidy scheme

New UK leader Liz Truss finalises huge electricity subsidy scheme

Alistair Smoot and David Milliken

LONDON (Reuters) – Britain’s new Prime Minister Liz Truss on Wednesday prepared the final result of a plan Details to deal with soaring energy bills, which look likely to cool inflation, but the country’s borrowing has risen by more than 100 billion pounds ($20 billion dollars) .

On his first day as UK leader after replacing Boris Johnson, special Russ told parliament she would support businesses and households preparing for a recession expected to begin later this year.

GBP/USD slumps to lowest level since 1985 partly as investors worry about the amount of debt Britain will have to sell for energy The support program and the tax cuts Truss has also promised to fund.

A source familiar with the situation told Reuters that Truss is considering freezing energy bills and that the cost of the plan could reach 60 £1 billion, 1Malay turned things around in the early stages of the Conservative-led movement by her refusal to ‘hand out’.

Deutsche Bank (ETR: DBKGn) said energy price support and promised tax cuts could cost 179 £1 billion, about a historic UK Half of the boost in pandemic spending has taken a toll on the country’s public finances.

Truss ruled out opposition Labour’s demands that she fund some spending by raising taxes on energy companies.

“I am against windfall taxes. I think it is wrong to prevent companies from investing in the UK,” Truss told lawmakers.

She will give details of the energy support package in parliament on Thursday.

More borrowing

Her finance minister Kwasi Kwarteng also said on his first day in office that borrowing will increase in the short term , to support households and businesses and fund tax cuts.

“We need to be decisive and do things differently. That means relentlessly focusing on how we unleash business investment and scale the UK economy, not how we reallocate surplus assets,” he said. Tell business leaders.

GBP/USD fell to its lowest level since 1985 USD 1 USD. 1985 and also fell nearly 1% against the euro.

While a weaker pound could increase inflationary pressures in the economy, the anticipated price freeze scheme could help ease consumer cost-of-living pressures that have been the worst in decades

Bank of England chief economist Huw Pill said the plan could slow inflation – which has exceeded % July – although it is too early to say the impact of the central bank rate hike.

The Bank of England forecast inflation to exceed % in August, and some economists Indicates a possible peak recently % if gasoline prices es – pushed up by Russia’s invasion of Ukraine – remain high.

Pill also said the Bank of England would not allow a surge in government spending to stimulate demand in the economy, thereby pushing up inflation.

Still, investors trimmed their bets on the Bank of England’s next scheduled monetary policy rate hike 75 basis points Note September 15 to 20 % of policy announcements from almost100% earlier Wednesday. Yields on two-year UK government bonds also fell.

Kwarteng met with Bank of England Governor Andrew Bailey and told him that “independence is really a cornerstone of how we see economic management”, comments that appeared to be aimed at reassuring investors that the new The government will not put pressure on the central bank.

Early in the Conservative leadership campaign, Truss said the government should have a “clear way forward” for monetary policy, although she then agreed on a less interventionist tone.

Kwarteng said he and Bailey would meet regularly, initially twice a week, to coordinate economic support.

($1=0.8721 pound sterling)



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