British Prime Minister Liz Truss said she would present her plans on Thursday to deal with rising energy bills, but would not impose a new tax on energy producers, instead raising the borrowing to finance the costly intervention.
Truss, who was sworn in as prime minister on Tuesday, vowed to act immediately to tackle one of the most daunting challenges for an incoming leader in postwar history, including rising energy bills, a looming recession and economic unrest. in the industry.
On Wednesday he chaired a meeting of his new cabinet before making his parliamentary debut as leader of the Conservative Party, taking on opposition Labor leader Keir Starmer in Prime Minister Question Time.
“I am against a windfall profits tax. I think it is a mistake to discourage companies from investing in the UK,” Truss told lawmakers, saying she would announce more details on Thursday.
A source familiar with the situation told Reuters that Truss is studying the possibility of freezing power bills in a plan that could cost close to 100 billion pounds ($115.33 billion).
New Finance Minister Kwasi Kwarteng told businessmen that borrowing will be higher in the short term to support households and businesses.
Investors have expressed alarm at the scale of the debt the government is likely to have to take on to finance its aid plan and the tax cuts promised by Truss during his campaign for the leadership.
The pound sank to a two-and-a-half-year low against the dollar this month, while long-term British government bonds posted their biggest drop since the start of the COVID-19 pandemic on Tuesday, adding to the recent collapse.