LIZ Truss is expected to freeze energy bills for households and businesses within days.
Yesterday, she was crowned the new Tory leader and today will be appointed as prime minister by the Queen at Balmoral.
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Her first job is easing the crippling cost of soaring energy bills for millions of homes and businesses.
What is an energy bill freeze?
The exact details of what an energy bill freeze would mean for households have not yet been released.
However, The Sun today reported that bills will be capped for at least four months.
It’s expected that household bills will be frozen at £1,971 a year until January.
Which would mean that the price cap would stay at its current limit.
The price cap is currently expected to rise on October 1 to £3,549 – a rise of 80%.
Some analysts fear that the cap could go up to over £5,000 in January without intervention.
Energy firms are locked in talks about the new plan.
It’s unclear how the cap will be funded, but one source suggested that cash will come partly as a loan to energy firms provided by banks, backed by the Treasury.
Industry bosses have previously suggested that it would be repaid via a levy on household bills after the crisis has passed.
Supporters of the plan say that it would help reduce inflation.
Liz Truss said yesterday in her speech in front of Conservative MPs: “I will deliver on the energy crisis dealing with people’s energy bills, but also dealing with the long-term supply.”
Why are energy bills so high?
As countries started to recover from the pandemic, demand for gas started to rise which pushed up the price in 2021.
The increase in prices pushed some energy firms into financial trouble, with 28 going bust.
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More recently, Russia’s invasion of Ukraine threatened supplies and drove up prices further.
Russia supplies Europe with 40% of its gas.
Last week, Russia turned off the last of its taps on its Nord Stream 1 pipeline. Yesterday, wholesale gas prices rose 10%, after Russia said it would not resume operations until the “collective West” lifted sanctions.
