Millions across the UK will see energy costs increase starting tomorrow, as the cap on domestic energy bills for typical households will be guaranteed at an average of 2,500 pounds ($2,870) annually for the next two years. The guarantee was announced by Prime Minister Liz Truss to replace the original price cap, set by industry regulator Ofgem, of 3,549 pounds ($4,189).
Households will also receive a 400-pound reduction in their energy bills, spread over six months, as part of the 150B-pound ($162B) public support package. In comparison, the average UK energy bill last year was 1,971 pounds ($2,182). About 85% of UK households use gas boilers for heat, with the war in Ukraine helping drive gas prices prices up by 400% over the past year.
The news comes as many citizens are already struggling to afford essentials due to rising inflation, with year-over-year inflation running at a 40-year high of 9.9%. The Bank of England announced Wednesday it would purchase long-term UK bonds over the next two weeks to ease bond market concerns.Read More