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The British government said on Wednesday it would reduce the wholesale cost of electricity and gas to businesses and businesses to less than half the market price from next month to help ease the burden of soaring energy costs but adding to rapidly rising government spending.
The wholesale price of electricity will be set at 211 pounds ($239) per megawatt-hour, and gas at 75 pounds per megawatt-hour, compared to the market price of 600 pounds and 180 pounds, respectively.
“We have intervened to stop businesses from collapsing, protect jobs and curb inflation,” said Finance Minister Kwasi Kwarting, who is due to announce a fiscal update on Friday.
Wholesale prices for gas and electricity soared in Europe after Russia began invading Ukraine and prices have been volatile since then. The final price for units under this program will be confirmed on September 30th.
European shares fell at the open on Wednesday, pressured by Russia’s decision to announce a partial military mobilization, which added to investor concerns about the US central bank’s third interest rate hike later on Wednesday.
The pan-European Stoxx 600 index fell 0.3 percent, with most of its sub-sectors declining. The interest rate-sensitive technology sector fell 1.2 percent, while energy stocks rose 1 percent, amid a rise in oil prices on news of Russian mobilization.
Russian President Vladimir Putin ordered a partial mobilization of the army, in a dangerous escalation of the conflict in Ukraine and the first such mobilization in Moscow since World War II.
