UK market up on Truss energy plans

UK market up on Truss energy plans
The UK prime minister Liz Truss (Image credit: Hollie Adams/Bloomberg)

The UK market has risen and sterling ticked up after Liz Truss’s announcement of an energy price cap yesterday (September 8).

The FTSE-100 rose 0.6 per cent this morning, after the prime minister announced an estimated £150bn package to shelter the UK from rising energy prices.

Truss told the Commons that the average household will have their annual energy bills frozen at a maximum of £2,500 for two years.

Energy companies will be capped on the amount they can charge per unit of energy used, though the details of this have not yet been announced.

Households which consume more energy will therefore pay more in bills.

The incoming cap is above the current average price ceiling of £1,927, but below the £3,549 that was due to come into effect in October. 

Each household will still receive £400 towards the cost of their bills through the energy bills support scheme, paid over six instalments from October, and green levies will be suspended.

This will mean household bills are likely to remain at their current levels.

The most vulnerable UK households will continue to receive £1,200 of support in instalments throughout the year, and an additional fund will be made available for households outside those schemes.

Businesses will have their energy prices capped at a similar amount, however this will last for 6 months before it is reviewed.

Details of the costs of the plan are due to be announced by the chancellor, Kwasi Kwarteng, at a mini-budget later this month. 

The pound also rose on the news, and has gained 1.15 per cent on the dollar since yesterday afternoon.

Earlier this week, sterling plunged to its lowest levels against the dollar since 1985, reflecting fears over high inflation, unaffordable energy bills and rising interest rates.