LONDON – Britain’s new Prime Minister Liz Truss prepared the final details of a plan to address skyrocketing energy bills on Wednesday, which is expected to calm inflation but add more than 100 billion pounds ($115 billion) to the country’s debt.
Truss told parliament on her first full day as Britain’s leader since replacing Boris Johnson that she would support firms and households bracing for a recession that is expected to begin later this year.
Sterling plummeted to its lowest level against the US dollar since 1985, owing in part to investor concerns about the amount of debt that Britain will have to sell in order to fund the energy support plan and the tax cuts that Truss has also pledged.
According to a person familiar with the issue, Truss is considering freezing energy costs in a scheme that might cost up to 100 billion pounds, a significant shift from her rejection of “handouts” during the early stages of the Conservative Party leadership contest.
According to Deutsche Bank, the energy price assistance and promised tax cuts might cost 179 billion pounds, or over half of Britain’s record epidemic spending drive, which has harmed the country’s public finances.
Truss rejected Labour Party requests that she fund some of the investment by boosting taxes on energy companies.
“I am opposed to a windfall tax. I feel it is incorrect to discourage corporations from investing in the United Kingdom,” Truss informed legislators.