U.K. Households Face £38 Billion Hit From Energy Bills, FT Says

(Bloomberg) --

U.K. households face a 38 billion pounds ($50 billion) hit from a surge in electricity and gas costs exacerbated by Russia’s invasion of Ukraine, the Financial Times newspaper reported. 

The increase for the 2022-23 year will be equivalent to a six pence rise in the basic rate of income tax, it said, citing an estimate by Aurora Energy Research Ltd. Britons were already bracing for a 54% increase in the energy price cap from April, and now economists estimate the energy regulator will need to impose another similar rise from October, pushing average household energy bills to over 3,000 pounds annually, the FT said. 

Britain’s finance minister Rishi Sunak isn’t planning fresh measures to help Britons cope with rising energy bills, even as calls grow from within his own Conservative Party to take further action, Bloomberg reported Friday. He announced a 9 billion-pound package of support in February, before Russia’s invasion. 

The opposition Labour Party has proposed a one-time windfall tax on oil and gas producers with the proceeds, along with a cut in the value-added tax, funding a reduction in household energy costs.

The war looks set to push inflation up further as it sends key commodity prices higher, with the Times newspaper reporting British Steel lifted its prices by about 25%. Drivers are paying record levels for gasoline and diesel, taxpayers are due a 1.25 percentage-point increase in payroll taxes in April, and the Bank of England is expected to raise rates again on Thursday.

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