UK to Freeze Energy Bills for Two Years

I mentioned the new British prime minister Liz Truss in a recent post titled Could the Political Winds be Shifting?, wherein I was surprised to learn she was planning on increasing UK energy production. She’s making headlines again today by announcing a major market intervention. The unprecedented government intervention will cap what energy firms can charge consumers, on a per unit basis, in order to keep prices close to the current Ofgem cap. The average annual household will see a bill frozen at around 2500 pounds.

Although she refused to provide the cost of this program, the UK Treasury has signaled it will ramp up borrowing in order to pay for it. It basically amounts to more government handouts/bailouts to consumers and seems quite inflationary. This is good for energy prices and bad for GBP/USD exchange rates. I’m becoming more and more convinced the most simple way to invest during this energy crisis is simply to short the currencies of countries which are short of energy. Something to ponder perhaps.

If you’d like to read the article in its entirety, use the line here or below:

https://www.politico.eu/article/uk-liz-truss-plan-freeze-annual-energy-bill-2500-pound-2024/