| 10 December 2023, Sunday |

UK considering bank loan plan to smooth energy cost hit – BBC

According to the BBC, the British government is examining ideas to smooth out a steep increase in energy bills that is set to impact homes in April.

Big banks would lend billions of pounds to energy firms under a cost deferral mechanism, allowing them to extend the increase in gas rates over five or ten years, according to the broadcaster.

Britain’s finance ministry might help by guaranteeing loans to energy companies.

The BBC reported late Friday that government officials were contemplating utilizing the Bank of England, which offered emergency loans to firms during the coronavirus outbreak, to give upfront money.

Other alternatives for the government to mitigate the impact of the tariff hike – which might result in bills rising by 50% due to a jump in international energy costs – include expanding a discount plan for low-income households or lowering energy taxes.

Prime Minister Boris Johnson is under pressure to act before a projected increase in the gasoline price ceiling, which is likely to push Britain’s inflation rate to 6% or higher in April, when tax payments for employees and companies are also slated to rise.

The cost-of-living squeeze is compounding the problems for Johnson, who is facing calls to resign from some members of his Conservative Party after revelations of parties in Downing Street when social mixing was restricted.

  • Reuters