Jacob Rees-Mogg has unveiled a new package of support that will slash businesses’ energy bills in half.
The Business Secretary confirmed that the Government will cap how much companies can be charged for energy amid concerns that thousands could collapse without further help.
The move caps bills at £211 per MWh for electricity and £75 per MWh for gas – less than half the expected cost this winter – and removes green levies.
The measures, which will be applied directly to bills, will begin in October and last for six months.
The Department for Business, Energy and Industrial Strategy said that schools, charities, hospitals and other non-domestic organisations will be covered by the policy alongside businesses.
A parallel scheme will be established in Northern Ireland, while the Government said it will provide equivalent support to non-domestic consumers who use heating oil or alternative fuels instead of gas.
It comes two weeks after the Government stepped in to cap household energy bills at £2,500 per year for two years from October.
The Business Secretary said the new policy would give companies the equivalent level of support to households.
FTSE 100 extends gains after energy support
The FTSE 100 has extended its gains after the Government confirmed it will slash businesses’ energy bills in half.
Business Secretary Jacob Rees-Mogg unveiled details of the six-month scheme, which will be applied directly to companies’ bills and come into effect in October.
The blue-chip index pushed 0.6pc higher.
Manufacturers welcome energy support
Stephen Phipson, chief executive of Make UK, says the support package will give businesses reassurance.
Industry will warmly welcome the timely announcement of an energy price cap for an initial six months for all business users.
Government has delivered a scheme which is simple to understand, giving reassurance to the business sector and making immediately available the much needed help companies have been calling for across the board at a time energy costs were spiralling out of control.
It does appear likely that prices will remain high for many months to come and industry is likely to need support for a longer period if we are to protect jobs and remain competitive, so the further announcement of a review on future support at the three month stage is reassuring.
We will monitor the impact of the cap closely, and will engage with the review mechanism later in the year to ensure that these priorities are recognised and understood.
We recognise that all parties have moved at pace and a long way. However, manufacturing businesses are under huge pressure already many are struggling to stay afloat. We hope that this support can be made tangible as quickly as possible and not applied retrospectively at the end of the next quarter.
Pubs and brewers call for more support from Chancellor
Emma McClarkin, chief executive of the British Beer and Pub Association, says further help is needed from the Chancellor in Friday’s mini Budget.
We welcome this very significant and critical intervention by the Government. It will be a lifeline for many pubs and brewers this winter.
It is crucial that business owners can easily understand what discount they will be receiving so they can effectively plan ahead, and the requirement for security deposits to enter new contracts must be removed as a barrier to fair supply.
Whilst this announcement has helped businesses to breathe an initial sigh of relief as they head into this critical period, more support is needed to tackle the cost of doing business and we need a plan beyond the next six months.
Our industry is one of only a few that supports jobs and livelihoods in every single part of the UK, and we have the potential to deliver growth in every single community we serve.
On Friday, the Chancellor must take steps to address the cost of doing business, by reducing the tax burden on our sector, allowing pubs and brewers the chance to not only survive this winter, but remain at the heart of local economies and their communities for many years to come.
Hospitality firms welcome ‘unprecedented’ support
Kate Nicholls, chief executive of UKHospitality, welcomes the energy support for businesses.
This intervention is unprecedented and it is extremely welcome that Government has listened to hospitality businesses facing an uncertain winter.
We particularly welcome its inclusiveness – from the smallest companies to the largest – all of which combine to provide a huge number of jobs, which are now much more secure.
The Government has recognised the vulnerability of hospitality as a sector, and we will continue to work with the Government, to ensure that there is no cliff edge when these measures fall away.
Liz Truss: New scheme will keep energy bills down
Prime Minister Liz Truss says:
I understand the huge pressure businesses, charities and public sector organisations are facing with their energy bills, which is why we are taking immediate action to support them over the winter and protect jobs and livelihoods.
As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind.
At the same time, we are boosting Britain’s homegrown energy supply so we fix the root cause of the issues we are facing and ensure greater energy security for us all.
Pound hits fresh 37-year low
Sterling dropped to a fresh 37-year low this morning as the currency continues to take a battering.
Russia’s announcement of a partial mobilisation of troops in Ukraine fuelled demand for the safe-haven dollar, while data showing a rise in UK Government borrowing also weighed on the pound.
Investors are also piling into the dollar ahead of an expected rise in interest rates by the Federal Reserve this evening.
The pound fell as much as 0.7pc against the dollar to $1.1305, its lowest since 1985, before paring losses slightly. Against the euro it was up 0.3pc to 87.32p.
West Ham betting sponsor fined for advertising on children’s websites
West Ham United’s main sponsor Betway has been fined more than £400,000 for advertising on children’s pages of the Premier League football team’s websites, the Gambling Commission has announced.
Oliver Gill has more:
The regulator said that for nearly a year and a half from April 2020, the Betway logo appeared on a web page offering users the opportunity to print out a teddy bear for children to colour in.
And for more than a year from October 2020, the Betway logo also featured on the “Young Hammers at Home” website.
Betway has a slew of sponsorship deals with sports clubs around the world as varied as the Chicago Bulls basketball team, South African rugby and West Indies’ cricket side.
The London-headquartered company’s website lays claim to have “operations [that] meet or exceed the highest industry standards”.
Oil prices jump as Putin mobilises troops
It’s not just gas prices that are on the rise this morning – oil has pushed higher too.
Benchmark Brent crude gained 2.6pc to just under $93 a barrel, while West Texas Intermediate was trading above $86.
It comes after Putin confirmed he ordered a partial mobilisation of troops in Ukraine and vowed to annex occupied territories.
The escalation has fuelled concerns of further disruption to energy supplies.
Software group Aveva snapped up in £9.5bn deal
Here’s some more on that Aveva takeover deal…
The software group has been snapped up by Schneider Electric in a deal that values it at just under £9.5bn.
Schneider will buy out minority shareholders for £31 per share. The French company, which already holds 59pc of Aveva, will pay about £3.9bn for the remaining equity.
The deal for Cambridge-based Aveva, which has more than 6,400 employees, is expected to complete in the first three months of 2023.
The acquisition will help to strengthen Schneider’s foothold in the UK, where it already has around 4,000 staff.
FTSE risers and fallers
The FTSE 100 has turned positive in early trading as investors look ahead to more details about energy bills support for businesses.
The blue-chip index rose 0.3pc, reversing its early losses.
Markets are waiting for details of how the Government will help companies cope with surging energy bills.
Housebuilders including Persimmon, Barratt and Taylor Wimpey were among the biggest risers following a report that Liz Truss will cut stamp duty in this week’s budget.
Aveva was up 2.2pc after Schneider Electric confirmed a £9.5bn takeover deal, while BAE Systems jumped 4.7pc as Putin’s escalation of Russia’s investigation of Ukraine bolstered defence stocks.
The domestically-focused FTSE 250 rose 0.2pc, with housebuilders Bellway and Redrow the top gainers. Games Workshop slumped 8.6pc following a downbeat trading update.
JD Sports to pay former boss Peter Cowgill £5.5m
JD Sports will hand at least £5.5m to former boss Peter Cowgill as part of an exit deal after he was ousted amid concerns about his corporate governance.
Mr Cowgill was pushed out in May following a series of issues, including a clandestine meeting in a car park with the boss of rival Footasylum.
He will be paid £3.5m over two years in the first part of the deal and £2m over three years for the second. He is also receiving his salary, benefit and bonus up to his departure in May.
The company said it would honour his contractual notice period of 12 months.
The agreement also means Mr Cowgill cannot work or advise any competitors to the high street sports chain and cannot solicit any of its employees.
He will also be kept on as a consultant to support chairman Andy Higginson and chief executive Regis Schultz.
French tycoon takes 2.5pc stake in Vodafone
Billionaire tycoon Xavier Niel has taken a 2.5pc stake in Vodafone, becoming the second French mogul to swoop on a British telecoms firm.
The entrepreneur bought the stake through his Atlas Investissement vehice, saying it saw “opportunities to accelerate both the streamlining of Vodafone’s footprint and the separation of its infrastructure assets”.
It added that it supported Vodafone’s intention to merge with rivals such as those in the UK and Italy and separate out its infrastructure assets like towers and fibre.
Shares in the FTSE 100 company rose 1.4pc.
It comes after fellow French tycoon Patrick Drahi took an 18pc stake in BT last year, fuelling speculation of a possible takeover bid.
Gas prices jump as Putin escalates Ukraine war
Natural gas prices jumped in early trading as Putin stepped up his war in Ukraine.
The Russian leader warned the West he is “not bluffing” over nuclear weapons as he announced a partial military mobilisation, which will see 300,000 reservists called up to the army.
Russia will also move to annex the territories its forces have already occupied.
Benchmark European gas jumped as much as 6.6pc as Putin raised the stakes in the war, stoking fears to further disruption to supplies.
The escalation offset Germany’s move to nationalise ailing energy giant Uniper in a move designed to protect its energy system from collapse.
FTSE 100 opens lower
The FTSE 100 has lost ground at the opening bell as markets await more details about energy support for businesses.
The blue-chip index fell 0.3pc to 7,173 points.
Government borrowing swells ahead of Truss tax cuts
Government borrowing climbed to £58.2bn in the first five months of the financial year – a sum that’s set to surge further as Liz Truss prepares to unveil tax cuts and energy bills support.
Inflation is already taking its toll on the public finances, with debt costs surging to £8.2bn. That’s the highest for any August on record.
Borrowing for the month was £11.8bn. This was ahead of forecasts but downward revisions to previous months meant the deficit for the year so far was in line with OBR forecasts.
The numbers will fuel criticism that Ms Truss is putting the public finances at risk and stoking inflation.
The Prime Minister has promised more than £30bn of tax giveaways in a bid to boost growth, and earlier this month pledged further support for household energy bills. More support for businesses is coming this morning.
Former BoE official: Short the pound
Liz Truss’s economic plan has been given short shrift by one former Bank of England policy maker.
Danny Blanchflower, now a Dartmouth College economic professor, has taken aim at the Prime Minister’s “disastrous” economic policies, which he said were in “total disarray”.
He also expanded on his concerns about the outlook for the UK economy, which is expected to tip into recession later this year. He suggested investors should short the pound.
Liz Truss to cut stamp duty
Liz Truss will cut stamp duty on home purchases in an effort to stimulate economic growth, the Times reports this morning.
The Prime Minister and Chancellor Kwasi Kwarteng will announce the measure on Friday as part of the emergency Budget.
Ms Truss reportedly believed that the tax cut will encourage growth by allowing more people to move and enabling first-time buyers to get on the property ladder.
Whitehall sources told the newspaper that the policy was the “rabbit” in the mini Budget.
Rees-Mogg to unveil business energy support
All eyes are on the Business Secretary this morning for more details about a multi-billion-pound support package to help companies cope with soaring energy bills.
Jacob Rees-Mogg is expected to unveil a package that will slash businesses’s energy costs in half amid concerns the crisis could spark a wave of collapses.
Electricity bills are expected to be slashed in half, while gas bills will be cut by a quarter. The measures will last for six months.
It comes after ministers intervened to cap households energy bills at £2,500 per year for two years from October.
5 things to start your day
1) Sir Richard Branson-backed bid to launch rocket from Cornwall pushed back again Virgin Orbit is planning over a dozen rocket launches from Cornwall in the next decade
2) Chocolate scratch-n-sniff cards on the menu at National Lottery Czech-owned gambling business aims to dramatically increase number of scratch card purchases
3) British millionaire numbers surge above France and Germany Recovery in UK markets boosts ranks of the wealthy, finds Credit Suisse
4) Jacob Rees-Mogg faces High Court showdown with 11 striking unions Trade unions launch judicial review over plans to replace striking workers
5) New Transport Secretary to meet union bosses in olive branch after months of rail strikes Dialogue with unions comes after a new wave of strikes announced for October
What happened overnight
Hong Kong stocks dropped at the start of trade this morning, reversing the previous day’s gains as investors geared up for an expected Federal Reserve interest rate hike.
The Hang Seng Index fell 0.768pc. The Shanghai Composite Index shed 0.5pc, while the Shenzhen Composite Index on China’s second exchange lost 0.7pc.
Tokyo stocks opened lower, with the benchmark Nikkei 225 index down 1pc, while the broader Topix index plummeted 0.8pc.
Coming up today
Economics: Federal Reserve interest rate decision (US), public sector net borrowing (UK)
Corporate: Supermarket Income REIT (full-year results); Petershill Partners, Keywords (interims)