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UK is considering bank loan plan to speed up energy cost hit – BBC

Fire broke out from a domestic gas ring oven in Durham, Britain, September 23, 2021. REUTERS/Lee Smith

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LONDON, Jan 15 (Reuters) – The British government is considering plans to accelerate a sharp increase in energy costs that should hit households in April, the BBC said.

Under the cost deferral mechanism, large banks will lend billions of pounds to energy companies, allowing them to spread the increase in gas charges over five or 10 years, the broadcaster reported.

Britain’s finance ministry could play a role by guaranteeing loans to energy companies.

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Government officials are also considering using the Bank of England, which provided emergency loans to businesses during the coronavirus pandemic, to provide initial funding, the BBC said on Friday, without mentioning its resources.

Other options for the government to reduce the impact of the tariff increase – which could raise charges by 50% after rising international energy prices – include expanding the discount scheme for low -income households. the revenue or reduction in energy taxes.

Prime Minister Boris Johnson is under pressure to act ahead of the expected increase in the fuel price limit that is set to bring Britain’s inflation rate to 6% or higher in April, when tax payments should also increased for workers and employers.

The pressure on the cost of living is exacerbating problems for Johnson, who faced calls to resign some members of his Conservative Party after revelations by parties on Downing Street when social mixing was restricted.

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Writing by William Schomberg; Edited by Jan Harvey

Our Standards: The Thomson Reuters Trust Principles.