New price cap - lower inflation but more in the end

The government are to finance the energy price cap by borrowing more than £100bn, much of which won't be real borrowing, but money printing, which is highly inflationary.

When will the money printing restart?

Are the forecast interest rate rises off the table now then?

I assume it will restart almost immediately given the scale of the proposed borrowing, this is more than £100bn on top of an already vast debt pile, is it really plausible the govt can sell this many bonds in a globally saturated market, other than at abnormally unaffordable rates?

By almost immediately you mean within the next month?

I assumed that the Bank of England intends to continue quantitative tightening and to raise interest rates. I'd be delighted to be wrong as I'd just taken out a mortgage on a tracker rate.

is there incentive for rich people or those with high energy needs to restrict their usage if they are over £2,500 annually?

is there incentive for rich people or those with high energy needs to restrict their usage if they are over £2,500 annually?

Yes. The price cap does not mean your energy bill will be capped at £2,500. It places a cap on the unit price of energy that equates to a household using the average amount of energy having an energy bill of £2,500.

The average detached house can expect a bill of £3,300.

Actually now I'm reading what Martin Lewis says about it, I'm puzzled as to what the policy really does mean in practise.
https://www.moneysavingexpert.com/news/2022/09/energy-bills-price-freeze-cost-of-living-government-liz-truss-/

It would appear that it's not an absolute cap, just a cap on typical rates per unit but you use more, you pay more? Is that correct?

This is my main objection to what is happening - it's going to fall on the taxpayer. It should be collected in higher corporate taxes from the energy sector.

Actually now I'm reading what Martin Lewis says about it, I'm puzzled as to what the policy really does mean in practise.
https://www.moneysavingexpert.com/news/2022/09/energy-bills-price-freeze-cost-of-living-government-liz-truss-/

It would appear that it's not an absolute cap, just a cap on typical rates per unit but you use more, you pay more? Is that correct?

So a lot of people will still get bill way over £2,500 a year.

Yes. The price cap does not mean your energy bill will be capped at £2,500. It places a cap on the unit price of energy that equates to a household using the average amount of energy having an energy bill of £2,500.

The average detached house can expect a bill of £3,300.

Inflation was due (according to Goldman Sachs) to rise to 22% next year, now apparently this might 'only' be 17%, which will still be the worst inflation for decades. The government are to finance the energy price cap by borrowing more than £100bn, much of which won't be real borrowing, but money printing, which is highly inflationary.

Goldman is yelling BS so it can exit pump.
Inflation is going no where near 22% and wont even stay near 17% lol.
They understand that the average Joe believes Gas prices will keep going higher.
Big Disclaimer ..... They wont. Gas and Oil is topped out.

What will happen is the GBP against the Dollar will crash because Liz Truss is doing money printer go brrr 130 billion. She is doing it at a major market low and the market isn't stupid, smart money will move GBP to risk on in under valued assets. FTSE100 might get a charity pump

And what will the normal people do when the GBP crashes vs the USD? Probably throw their life savings into Bitcoin the Ponzi Pyramid scheme. Thats where I take their life savings and pensions, then buy Chateaubriand and Merlot.

It is very likely the global markets will do a massive bull trap retrace and then continue their bearish trend because the only reason the markets pumped from 2020 was because of money printer go brrr.

Biden did his Green Energy Bill 370 Billion.
Liz has done her Energy Price Lock 130 Billion.
European Countries are securing Credit lines from Government ....
You must see where this is heading?

There will always be a pundit who says BUT BUT BUT Modern Monetary Theory.
And I am like LOL!
The Keynesian's in the group will always surface.
Ignore them they been wrong about this whole crisis and Paul Krugman belongs in Jail.

But anyway after this money printing madness pump say hello to a 1929 crash. Its going to be biblical.

Everyone is so terrified that Energy Prices are going to go up. Im not scared. Im on a variable tariff and not scared 1 bit.
I'll lock my tariff when Gas prices return to about 4p per KwH.
However inflation will go to 75% over the next 10 years I can guarantee that. It just wont happen next year.

The markets are all toast through and the Crypto ponzis are all going to do a NASDAQ flop.

Meanwhile energy companies making £150bn in profits this year alone. Absolutely criminal that there isn’t a further windfall tax imposed to pay for at least some of this.

Came out today that the B of E are also advancing £40bn in loans to the utilities to enable them to pay for gas and electricity, as at least some of them were struggling to do so. So not only are we about to pour taxpayer cash into the big corporations and OPEC with no strings attached but we are also pushing money into them via a different route. Hard to believe they will ever repay these 'loans'. It's sounding more and more like the 2008/9 banker's bonus protection scheme.

Completely agree. I don’t find it surprising that someone with links to energy companies, and who’s leadership campaign was indirectly funded by energy companies has protected their interests. I do however find it interesting that she’s so brazenly and without care decided to not just protect their interests but further them, and directly give them money from the taxpayers purse. How on earth is that free market? Thatcher would turn in her grave at the state of this.