UK Gov. to take measures over extraordinary profits in energy sector
Britain’s government is evaluating extraordinary profits in certain parts of the electricity generation sector and will take the appropriate steps.
The United Kingdom government will be evaluating extraordinary profits in the energy sector and taking the necessary measures to support the citizens, Nadhim Zahawi, Chancellor of the Exchequer, said on Thursday.
In a statement, the UK treasury said that "The Chancellor added the Government continues to evaluate the extraordinary profits seen in certain parts of the electricity generation sector and the appropriate and proportionate steps to take."
Zahawi had a meeting on Thursday with outgoing UK Prime Minister Boris Johnson, Business and Energy Secretary Kwasi Kwarteng, and representatives of large energy companies like RWE, EDF, E.ON, National Grid, Uniper, and Energy UK to discuss the rising energy prices, diversifying energy suppliers, providing government help for vulnerable households, and strengthening domestic energy security.
"We have already acted to protect households with £400 [$488] off energy bills and direct payments of £1,200 for 8 million of the most vulnerable British families. In the spirit of national unity, they agreed to work with us to do more to help the people who most need it," Zahawi said.
All officials attending the meeting stressed the need for investment in the North Sea oil and gas, and renewable sources of energy that would enhance UK energy security.
Energy prices in Europe skyrocketed after the February war in Ukraine and the imposition of several sanctions packages against Moscow. Consequently, the UK Office of Gas and Electricity Markets (Ofgem) raised the allowed maximum annual electricity bill limit from 1,400 to 2,000 pounds ($2195 to $2440), with the next revision to be scheduled for October 2022.
UK: inflation reaches its highest since 1982
The cost of living, including the cost of food and motor fuel, is rising at unprecedented levels as inflation further rises.
With inflation at a 40-year high, wages are being stretched as price rises erode the value of the pound in their pocket. The UK has especially witnessed a series of walkouts in the last months of rail workers due to poor job security and low wages.
For the time being, this is the highest inflation rate of all G7 member countries, as Japan and Canada have yet to publish their June figures.
The Bank of England has raised its interest rate five times since December in an attempt to stem rising prices. It's expected to raise it again by as much as 50 basis points, or half a percentage point, at its next monetary policy meeting in August.
The Office for National Statistics (ONS) reported a 42% year-on-year rise in petrol prices and an almost 10% increase in food prices, the main drivers of inflation last month.
UK Finance Minister Nadhim Zahawi had stated that other countries were facing runaway inflations and the government was joining forces with the Bank of England to tackle the problem.
"Countries around the world are battling higher prices and I know how difficult that is for people right here in the UK, so we are working alongside the Bank of England to bear down on inflation," Zahawi said in a statement.