U.K. PM Truss Announces Plan to Freeze Household Energy Bills for 2 Years

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U.K. PM Truss Announces Plan to Freeze Household Energy Bills for 2 Years

By Geoffrey Smith 

Investing.com -- U.K. households and businesses face a smaller, but perhaps longer-lasting, rise in their energy bills than seemed likely a couple of weeks ago.

New Prime Minister Liz Truss told the House of Commons on Thursday that she intends to set the maximum dual-fuel bill for a typical family home at 2,500 pounds ($2,880) a year for two years, starting in October. That's over 1,000 pounds less than had appeared likely after the U.K. energy regulator Ofgem's latest review of its price formula. However, it still represents an increase of more than 100% from what households were paying last winter.

Households will still receive the 400-pound rebate promised them earlier this year by the previous government led by Boris Johnson.

In addition, Truss said, there will be a new six-month relief scheme for businesses and charities which will aim to give equivalent support. She also promised "focused support" to vulnerable industries after that scheme expires.

The government will aim to identify which sectors need support within three months, Truss added.

Truss avoided giving much detail about how the plan will be financed, a key worry that has weighed on sterling and on U.K. government bond markets in the last month. Markets will have to wait up to a month for the new Chancellor of the Exchequer, Kwasi Kwarteng, to spell out those plans.

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