UK halves winter energy bills for businesses

STORY: Britain pledged on Wednesday (September 21) to cap energy costs for businesses.

The government said wholesale electricity and gas prices would be less than half the market rate from next month.

That will relieve pressure from soaring energy costs, but add to the country's fast-rising spending.

British business minister Jacob Rees-Mogg:

"Well, the difficulty with giving you a cost figure is that this will depend on where the price of energy goes over the winter and that's very difficult to forecast so I can't give you an absolute cost but we are talking about many billions of pounds (REPORTER: tens of billions) it will be into the tens of billions, unquestionably."

Wholesale prices for electricity will be capped at about $239 per megawatt hour.

Gas will be capped at $85 per megawatt hour - well below forecast market rates.

Groups representing businesses from pubs to steelmakers welcomed the intervention.

The government did not publish any estimate of the cost, but reports have put the price of six months of support at up to $48 billion.

That is on top of more than $113 billion for a previously announced scheme to help households.

The final unit prices will be confirmed on September 30.

The business energy scheme will initially apply from October 1 to March 31 next year.

Finance Minister Kwasi Kwarteng is due to give a statement on Friday (September 23).

He is expected to set out how he will pay for the energy scheme, while also delivering on promises to cut taxes.