Max Verstappen wins the Dutch Grand Prix for the fourth time in a row. Liz Truss ponders with the Chancellor-designate a £100 BILLION proposal to freeze energy bills as gas prices soar by a further 30% due to Russia’s pipeline disruption. Kwasi Kwarteng is attempting to reassure the markets about the avalanche of government debt.
The new leader of the Conservative Party is expected to be unveiled this afternoon, with Liz Truss becoming prime minister tomorrow.
There are signs that Ms. Truss intends to freeze energy bills with a massive £100 billion rescue package.
As a result of Russia’s suspension of a vital pipeline to Europe during the Ukraine conflict, gas prices have soared again.
Liz Truss is mulling a £100 billion plan to freeze energy bills as she prepares to become the next Prime Minister of the United Kingdom.
As the results of the Tory leadership contest are expected by midday, Ms. Truss has vowed “immediate” action to lessen the burden on struggling families.
HOW NEW PM’S FIRST DAYS IN OFFICE WILL PAN OUT
TODAY 12:30PM
The announcement will be made in the Queen Elizabeth II Centre in Westminster by Sir Graham Brady, chairman of the 1922 committee.
TONIGHT at 9AM
Boris Johnson will deliver a farewell message outside of No. 10. Next, he will journey to Balmoral, Scotland, to ask the Queen to accept his resignation.
TOMORROW LUNCHTIME
After independently going to Scotland, the new leader will be greeted by the Queen and tasked with establishing a new administration.
TOMORROW 4PM
The new prime minister will arrive at 10 Downing Street to deliver his first address. They will then propose important Cabinet positions and convene meetings to discuss national security issues.
WEDNESDAY 9AM
The new cabinet will consider issues such as the rising cost of living at a meeting.
WEDNESDAY 12PM
The incoming prime minister will field questions from the House of Commons.
Speculation is growing that she may take a drastic measure similar to a furlough, perhaps by loaning companies money to reduce spending.
As a result of Russia’s move to shut down a vital gas pipeline, wholesale gas prices climbed about 30 percent this morning.
Kwasi Kwarteng, the incoming chancellor, has been rushing to reassure markets that, despite the fact that government borrowing will be “looser,” it will still be “responsible.” In addition, Ms. Truss has promised a spate of tax cuts designed to encourage economic growth.
Yesterday, Ms. Truss told the BBC that she will announce extra aid for struggling families within a week, although she declined to disclose specifics.
She noted on the program Sunday with Laura Kuenssberg, “Before you are elected prime minister, you lack the resources to get things done.”
Therefore, it will take a week to finish the plans and ensure that they are ready to be announced. I am unable to share specifics at this time. It would be inappropriate.
This morning, wholesale gas prices in the United Kingdom rose by 20 to 30 percent, a substantial increase for the energy industry.
The price has increased due to Russia’s state-owned energy corporation Gazprom’s late decision to postpone the reopening of the critical Nord Stream 1 pipeline to Europe.
The price of natural gas per therm in the United Kingdom increased by 86 pence, or 21%, to £4.96 this morning. At the beginning of 2021, the price per therm was only 40p. Last week, the price per therm surpassed £7.
In addition, the primary European benchmark Dutch TTF October gas contract jumped by €62 (£52.53), or 30%, to €272 per megawatt hour (MWh) as of roughly 7:30 a.m. today, reversing the falls of the previous week.
Nord Stream 1 is the largest gas pipeline between Russia and Europe, with a capacity of around 55 billion cubic meters per year.
While the United Kingdom receives only 4% of its gas from Nord Stream 1, other countries, such as Germany, are much more dependent on the pipeline; thus, its closure is driving up international energy prices.
Concerns have been raised that, in order to conserve energy, manufacturers may be obliged to adopt a four-day workweek. No date for the restarting of Nord Stream 1 has been set.
Liz Truss has promised “immediate” action to assist afflicted families.
As a result of Russia’s decision to shut down the vital Nord Stream 1 gas pipeline, wholesale gas prices increased by about 30 percent this morning.
There are concerns that many homes will be unable to pay their energy bills in October due to the anticipated increase in energy prices.
Bill Farren-Price, head of macro oil and gas research at energy consultants Enverus, commented on the decision on BBC Radio 4’s Today programme: “After Russia failed to reopen that pipeline, prices would inevitably rise.”
‘However, it is becoming increasingly clear to everyone studying these markets that Russia’s weaponization of gas exports and a complete suspension of supply to Europe are no longer implausible.
And I think that’s what people are afraid about now: if it’s a really cold winter, the demand for gas across Europe and even the United Kingdom will exceed what can be imported.
It will cause prices to recover to or surpass the highs recorded at the end of August.
This morning, the FTSE 100 index of leading companies sank 64 points, or 0.88 percent, to 7,217.43, as the value of the pound continued to decline against the dollar.
Derek Lickorish, chairman of Utilita, which supplies 800,000 homes, claimed on BBC Radio 4’s Today: ‘When the banking system crashed on October 8, 2008, Gordon Brown made available a £500billion facility to bail out the banks.
It is now time for the government to assist energy consumers, including both residential and commercial customers.
‘And I think that, if this is what we’re going to do – and I want to emphasize that we don’t know – it will cost between £60 billion and £100 billion to freeze prices for all customers for around one year.
However, we cannot predict what will occur with the January 1 price hike, and gas prices will peak today. This suggests that prices are beginning to be included into not only the January cap, but also the April cap, which may be as high as six.
In a Financial Times article, Mr. Kwarteng highlighted the ‘fiscally prudent’ aspect of the incoming government.
Mr. Kwarteng, the current Business Secretary, suggested that there would be “some budgetary flexibility” in a Truss administration to help families get through the winter, emphasizing that it would be “the right thing to do.”
He argued that the United Kingdom does not need “severe budgetary tightening” by referencing the UK’s debt-to-GDP ratio in comparison to other major economies.
According to the OECD, the current government plan is contractionary, which can only lead to a downward cycle when the goal should be the opposite. However, I can tell you that this will be implemented in a fiscally responsible manner. Liz is committed to a lean state, and once the first shock subsides, we will attempt to reduce the debt-to-GDP ratio over time,’ he added.
Mr. Kwarteng, a close political and ideological ally of Ms. Truss, described how he would handle the Treasury, declaring that the incoming administration will be “decisive and distinct.”
This requires a focus on investment and growth as opposed to taxation and expenditure. It is about extending the size of the British economy, not fighting over what remains,’ he continued.
His comments parallel those made by Ms. Truss on Sunday, when she stated that her plan to reverse the increase in national insurance is ‘fair’ despite the fact that it directly favors persons with higher incomes.
She told the BBC that “growing the economy benefits everyone” and that seeing things through a “redistribution lens” is “incorrect.”
Labour took advantage of the chance to accuse the Conservatives of stealing its ideas.
Nick Thomas-Symonds, a frontbencher, remarked on the BBC’s Westminster Hour that this was his party’s latest attempt to influence the political climate.
In central London, the new leader of the Conservative Party will be revealed just after noon.
Both candidates have spent over a month campaigning across the nation in a bid to win over the party’s 200,000 members.
Tomorrow, the victor will become the third Conservative prime minister since 2016, when David Cameron resigned following the Brexit referendum loss.
Chancellor-in-waiting Kwasi Kwarteng has struggled to persuade markets that government borrowing will remain’responsible’ despite being ‘looser.’
Rishi Sunak (shown here leaving his London residence today) is expected to lose the Conservative leadership contest to Liz Truss.
Boris Johnson was photographed today at Downing Street, where he will remain until his official transfer tomorrow.
They have a frightening in-tray, with the conflict with Russia damaging the economy and major party tensions surrounding the legacy of Boris Johnson.
The official announcement will be made by Sir Graham Brady, chairman of the 1922 Committee of backbench Conservative MPs.
After the announcement, it is anticipated that the new leader would deliver a speech before spending the remainder of the day completing Cabinet and ministerial selections and preparing their first prime ministerial address.
Mr. Johnson requested that his party gather around the winner of the contest over the weekend.
In the Sunday Express, he declared, “Now is the moment for all Conservatives to unite and unconditionally back the new leader.”
In a change from precedent, Mr. Johnson and his successor will travel to Balmoral on Tuesday for the appointment of the new prime minister, rather than Buckingham Palace, after the election results are known.
Mr. Johnson will formally tender his retirement on Tuesday at the Queen’s home in Aberdeenshire. According to supporters, this event will be “very tragic” for the departing prime leader.
During a future meeting, the new Conservative leader will be asked to form a government.