A plan set out by new Prime Minister Liz Truss aims to borrow billions in order to limit the expected increase in energy bills for millions across the UK.
As reported by the BBC, a typical household's gas and electricity bill is now set to rise from £1,971 to a whopping £3,549 in October 2022. The UK Government is now understood to be planning to pay energy firms in borrowed money to subsidise bills, so customers will not be expected to repay the support.
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It is now understood that the plan would see over £100 billion added to the government's list of borrowed money. However, the overarching figure will all depend on gas and energy price movements in the future - in what is a highly interchanging market.
It is unclear at how long the government support will last for UK household. However PM Liz Truss has pledged that she will "deliver on the energy crisis".
Details on her upcoming plans are set to be announced on Thursday, September 8 2022. Energy bosses have been reporting that a government-backed superfund is the "only game in town" when it comes to bringing prices down.
However, it was understood that the government was reluctant to see money added to customer bills for up to two decades, so that energy companies could pay back loans. The government is also thought to be reluctant to add to the cost of general taxation, given the pledges made that there will be tax cuts in the future.
Kwasi Kwarteng - tipped to be the new chancellor - has already indicated the government is prepared to borrow to support the economy.
Government sources say that over time, new energy supply measures - such as cutting the link between renewable sources and the gas price - will lower costs while a growing economy will shrink the proportion of overall debt to the size of the economy.
For more information on what support is available from the government on energy bills, visit the GOV.UK website here.
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