27 May 2022 - Sunak announces 25% windfall tax

The Government announced yesterday that it would introduce a package of measures to help with the cost-of-living crisis that is threatening to engulf the economy. Chancellor Rishi Sunak announced that every household will receive a £400 payment to contribute towards their energy bill. That is replacing the £200 payment that had already been announced. Furthermore, the £400 will not need to be repaid over five years as the £200 payment had been. Eight million of the lowest income families will receive a one-off payment of £650. Additionally, the disabled will receive a payment of £150. This means that the worst-off households will benefit from these measures to the tune of £1,200. Having seen the Chairman of Ofgem, the fuel and energy regulator, announce this week that the energy cap will rise by a further £800 in the Autumn, these measures have been welcomed by all sides of the House of Commons. The additional payments that will total approximately £15 billion will be partly funded by an additional levy on the profits of energy companies. That will amount to £5 billion. The Chancellor refused to call it a windfall tax when interviewed following the announcement. Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.