As a result of the Ofgem price cap, energy corporations are expected to rake in £17BILLION EXTRA PROFITS over the next two years, resulting in 22% inflation by January.
Investment institution Goldman Sachs estimated that inflation will reach 22% in 2023.
According to leaked Treasury data, energy firms will earn an additional £170 billion.
The numbers will put pressure on the subsequent prime minister to implement a windfall tax.
This winter, Britain could see an inflation rate of 22%, leaving millions unable to pay their bills and businesses bankrupt, while energy giants are forecast to earn an additional £170 billion in profits, increasing pressure on the next Prime Minister to impose a windfall tax.
Goldman Sachs predicted that inflation will double as the price cap on energy bills continues to increase due to skyrocketing gas prices, with rising food prices and a weak pound also contributing to the problem that is pushing the United Kingdom into recession.
Leaked Treasury predictions revealed by Bloomberg indicate that the mounting crisis would benefit energy giants, as oil and gas firms will earn an additional £170 billion this winter as families are forced to choose between food and heat.
On September 6, officials will present the astounding figures to the next Prime Minister, putting pressure on them to impose another windfall tax to alleviate the energy crisis this winter.
A tax at the current windfall rate of 25% would generate billions of pounds for the Treasury, which could be used to aid households experiencing a cost-of-living crisis.
Liz Truss, the anticipated winner of the Conservative leadership contest, has stated repeatedly that she opposes increased taxes and favors tax cuts to stimulate economic growth.
Ms. Truss stated that a windfall tax on the enormous earnings of energy firms would “send the wrong message to investors.”
Graphs demonstrate that by next year, energy bills might reach a staggering £7,263
After Russia began restricting supply to Europe, gas prices in the United Kingdom skyrocketed, triggering a global scarcity and forcing EU leaders to hunt for supplies.
Fears that Russia could soon turn off the gas tap completely have pushed EU prices to near-record levels, and governments are already debating energy rationing.
BP announced in August that its profits had reached a 14-year high, with the gas giant earning £6.9 billion between April and June, compared to £2.3 billion a year earlier.
In the same year, Shell’s profits reached about £10 billion, while Centrica, the largest gas supplier in the United Kingdom, saw its profits climb fivefold to £1.3 billion. Both corporations distributed millions of dollars in dividends to their stockholders.
This week, Ofgem declared that the energy price cap would increase to £3,549 for the average UK household, making energy bills unaffordable for all citizens.
The US investment bank Goldman Sachs has predicted that the price ceiling will increase by an additional 80% by next year.
The bank stated that inflation might reach 22,4% in 2023, which would reduce Britain’s GDP by 2.3%.
The Treasury estimates that a windfall tax imposed in May will raise £5 billion in its first year.
Legislation enacted in July authorizes the tax to continue until 2025; it permits corporations to reduce the tax’s impact by investing in oil and gas extraction, which could enhance the energy supply.
The government has thus far rejected the imposition of the windfall tax on electricity producers due to the fact that rising gas prices have increased the price that electricity producers can charge.
Some electrical producers have increased their earnings despite supplying less energy.
Energy producers account for 40 percent of the additional £170 billion in profits, according to leaked data.
The Treasury stated that it did not recognize the figures and cited the revenue that would be generated by May’s windfall tax.