Faisal Islam
BBC Economics Editor

Image source, Getty Images

Within government, the energy situation is privately being referred to as an “emergency”, and what we will see today is a crisis level response akin to the Covid pandemic.

Essentially, because the UK is more reliant on imported gas than other similar nations, we are among the most impacted. Energy companies have already paid for this winter's gas, at prices that their customers won't be able to pay. If they were to pass on this the result would be a severe recession, and even higher inflation.

As a result of today’s intervention, inflation should be lower and the depth of any recession shallower.

But it is important to note that there is considerable household pain even at today’s price levels. And instead of smoothing today's prices via bills over the next decade, it is the government which will simply borrow the money.

That raises real questions about how much space the prime minister has for her promised massive immediate tax cuts.

It will provide vital support for households and business, but the fine detail of exactly how much, could also face judgement in some jittery markets.

Ione Wells
Political Correspondent, BBC News

Opposition parties had also been calling for a freeze to the energy price cap. The main division between them and the government is how it’s paid for.

Labour have made it clear they think profiting oil and gas companies should contribute, the government doesn’t.

Opposition parties are also likely to push on energy supply and demand.

They want the government to ramp up cheaper renewables like onshore wind and solar, as well as home insulation.

They’re less keen on the government’s plan to lift the ban on fracking in England and issue more licenses for North Sea oil and gas.

In terms of the Tory backbenches - some of those who didn’t back Liz Truss to be the Tory leader tell me they’re nervous about the billions of pounds of borrowing that will be announced before the next election.

That was a key sticking point between Rishi Sunak and Liz Truss throughout the campaign.

Prime Minister Liz Truss is about to announce plans to limit soaring energy bill rises.

This is some of what we think we will hear from her:

• In England, Scotland and Wales the £3,549 price cap due to come in October is expected to be reduced to around £2,500 for the typical household
• The £400 payment for all households to help with energy bills will go ahead as planned from October

• These measures mean a lot of people's bills will be similar to what they have been since April at £1,971

• Plans for businesses are less clear, but we know the measures being looked at include lowering the cost of energy for firms
• The government is expected to borrow at least £100bn to pay for all this and we don't know how long support will last

Kevin Peachey
Personal finance correspondent

Fixed deals allow you to pay for energy at a set rate for a set period of time, but you are locked in.

Plenty of people whose fixed deals have expired in recent months may have considered fixing again, given the outlook of rising energy prices.

In fact, they might have received messages from their supplier encouraging them to do so.

This has been an extremely expensive option, but one which some understandably chose to take given the eyewatering forecasts of soaring bills.

So what happens if prices are capped and you're on a fixed deal?

Campaigners say the government should tell suppliers to allow people to switch without penalties. But it could end up being something customers have to negotiate. We're hoping to find out more on this later.

If you fixed within the last 14 days, you can cancel without charge.

Image source, Reuters

PM Liz Truss left No 10 a short while ago.

She's on her way to the Commons, where she will reveal a package of support to deal with rising energy costs.

Image source, Cheryl Horne

Millions of people around the country are desperate for more help to cope with the soaring cost of energy.

Cheryl Horne, a pensioner from Nottingham, in the Midlands, says she has been planning to cut back on food to be able to afford her energy bill which she expects to rise from £61 a month to £126 under the current price cap rise due in October.

"I don't know what's going to happen in the winter months," she says. "I have to keep warm."

Meanwhile, Michael Ball from Kirkcaldy, in the east of Scotland, faces having to move back in with his parents because he expects his energy bills - which he pays via a prepayment meter - will double from £400 last winter to £800 this time.

"I'm stressed out," says Michael.

Businesses, too, are facing extreme rises in energy costs and Peter Ensinger who runs a pizza and kebab shop in Worksop, south-east of Sheffield, fears he may have to declare bankruptcy if he can't keep up. "It's a nightmare," he says.

Like many of us, Cheryl, Michael and Peter are waiting to hear what help Liz Truss will announce this morning. We'll check back in with them later to see that they think of the measures.

The energy price cap is not a limit on what you can pay in total for a year on your energy bills, but rather a restriction on the price that consumers can be charged for an individual unit of energy - known as a kilowatt hour (kWh).

So that means that if you have your heating turned up high or use the kettle a lot, you will pay more on your energy bill than someone who doesn't.

When anyone puts an annual figure on the price cap - they are talking about the average (or typical) bill that a home with normal energy usage would pay.

The price cap set by the energy regulator Ofgem is currently £1,971 for a typical home a year - and we expect the government to restrict this to around £2,500 later today because it was set to go much higher in October. But we should say it again – if you use more energy than the average household, you will pay more than that amount.

It is based upon three main costs, the price of both electricity and of gas – in kWh – and the standing charge for having an energy supply to your home.

Energy bills depend hugely based on a variety of factors, with some of the key ones including:

• how high you have your heating set
• the number of people living with you using energy
• how well insulated your home is against heat loss

For those who like some numbers to compare, a typical home - like a three-bed with around two to three residents - normally uses around 12,000 kWh of gas and 2,900 kWh in electric over the course of a year.

Read more here.

Peter Smith, of National Energy Action – a charity working to end fuel poverty – says while it appears the scale of the expected government intervention is going to be "vast", millions of households will still be left with bills at "unimaginable levels".

Speaking on BBC News, he said the major benefits of a freeze would go to affluent households that have higher energy use.

"Many of those households that are already struggling and use very little energy may not see a commensurate benefit," he said.

He called for a lower rate for prepayment customers, who he said already "regularly self-disconnect when they can’t afford to top up their energy".

And he warned: "If we’re reliant on just an intervention in Great Britain, there is a real risk that households in northern Ireland could be left out in the cold."

He added the charity was hoping to hear a commitment to energy efficiency in the new PM's announcement: "We need to look at the root cause of why we’re exposed to this energy crisis."

John Campbell
BBC News NI Economics and Business Editor

Image source, Getty Images

Northern Ireland is a separate energy market from the rest of the UK.

Energy policy is set by the local Department for the Economy and there is local oversight by the Utility Regulator.

This means that whatever is announced by the prime minister will not automatically apply in Northern Ireland.

Normally additional government spending on energy in Great Britain would mean a proportionate sum of money would be sent to Stormont for ministers to fund their own scheme.

But Stormont is currently semi-suspended so ministers cannot take new spending decisions.

There is however little doubt that support will come to Northern Ireland but the when and how is unclear.

Read more about Northern Ireland's energy situation here.

Kevin Peachey
Personal finance correspondent

Levelling Up Secretary Simon Clarke told the BBC the government wanted to offer “comfort and clarity” for households and businesses with this energy plan.

That is not easy. Why? Because any cap creates difficulties in how it operates.

There are big questions over how to help those in Northern Ireland who are not covered by the same pricing rules at present.

There are others who fall outside the current regulations on price caps - households which use heating oil, people living in mobile home parks, those with communal heating in their blocks. They will want to know what assistance is available.

Finally, tenants who pay rent including bills will want landlords to pass on any savings.

Image source, ANDY RAIN/EPA-EFE/REX/Shutterstock

It's not just the general public who are waiting to hear about what help they might get: businesses which are also facing ever-rising costs are hoping to hear news about support from the prime minister today.

Abdul Shahid, who runs the Masala restaurant in Derby city centre, says his business needs help "now, not three months later".

He tells BBC News they are definitely thinking about closing down, adding that spiralling costs are "very stressful".

We don't have as much detail about what might be coming for businesses later, but the system to support them could be more complex than that for households and is likely to be reviewed more often.

According to reports, it could see the government force energy providers to offer specific reductions on the unit price of the energy used by firms.

Business groups have welcomed the plan, although the British Chambers of Commerce has warned "it remains to be seen" whether it will go far enough in providing the support that firms need.

The government's plan to shake up the British energy market is "wrong", says Ed Miliband, the shadow secretary for climate change.

Speaking on BBC Radio 4's Today programme, Miliband says this idea (details in the post below) needs to be "debunked".

He says the proposal from energy industry trade association Energy UK would "lock in massive windfall profits" for electricity generators.

What Energy UK said is that it'll accept slightly lower prices now if it can have much higher prices over the following 15 years, Miliband says.

"This would be a terrible deal for the British people, a terrible deal for bill payers.

"The right thing to do... is not to do some dodgy deal with these companies, but to do a windfall tax."

Justin Rowlatt
BBC Climate editor

The BBC has learnt that the government is planning to shake up the British energy market so that the measures to limit bills don't end up funnelling billions of pounds of taxpayers' money to suppliers who are profiting from the higher price of gas.

The energy market consultancy Cornwall Insight calculates more than £40bn of the estimated £100bn of the proposed energy price cap could be swallowed up in excess profits.

Senior officials have had a series of meetings with firms to discuss how contracts might be changed to prevent this from happening.

The energy companies concerned, mostly renewable and nuclear businesses, have agreed at least in principle to accept new long-term contracts at fixed prices well below current rates.

Why? They say it's because they recognise their vast profits aren't justified during a national crisis. But they will also be aware that spending billions of pounds of taxpayers' money on private profits isn't politically sustainable forever.

Image source, Bluebell Dairy

Unlike domestic customers, energy bills for businesses are not capped and the pain of rising costs is proving acute for many companies, especially small firms.

Rosemary Brown, director of luxury ice cream-maker Bluebell Dairy, tells the BBC that a year and a half ago the firm's energy bills were about £35,000 but it is now looking at a cost of £80,000.

"If we were to renew tomorrow, the stark reality they would be up at about £225,000 a year, which is such a huge increase," she said.

Liz Truss is expected to announce help for businesses when she outlines an energy relief package this morning, something welcomed by Brown.

“Certainly at the moment we need to cap the energy costs. We need help with capping the energy costs for the immediate future."

Ahead of her Commons statement, Prime Minister Liz Truss has emphasised she will "deal hands-on with the energy crisis".

In a post on Twitter, external, she writes that the government "will take immediate action" to assist both people and businesses with their bills.

Truss also says she plans to take action to "secure our future energy supply", which she says will "tackle the root cause of these problems - so we are not in this position again".

We're hearing now from money-saving expert Martin Lewis.

He says he welcomes the cost-saving measures that are expected to be announced today. He says the plan will not be perfect, but no solution is.

Millions of people will breathe a sigh of relief that they will be able to pay their energy bills this winter, he says, but further work will need to be done to make sure the lowest earners can survive the soaring price rises.

He tells BBC Radio 4's Today programme the plan should be in place for at least 18 months to two years to give people peace of mind.

Lewis also calls for those who are on fixed-price energy tariffs to be allowed to switch to the new state-subsidised energy tariff without facing any exit penalty.

Kevin Peachey
Personal finance correspondent

Since April, the price cap has been £1,971 a year (or £2,017 for prepayment meters) - a big rise from the previous figure of £1,277 a year (or £1,309 for prepayment meter).

The latest Ofgem announcement is set to raise the typical bill to £3,549 a year (or £3,608 for prepayment meter) in October 2022.

The previous government support package announced in May was based on a forecast of £2,800 a year from October, which is why there have been loud calls for more help to be provided.

Wondering what help is available already? Here's a guide.

Image source, .

Capping the rise in energy bills will undoubtedly bring relief to millions of consumers. But even limiting bills to £2,500 a year for a typical household- as the government is expected the announce - is still a sharp rise from a year ago.

Last October, the price cap meant the typical bill was £1,277 a year.

Image source, .

So, even though the government's expected intervention will save households from a truly terrifying bill of £3,549 on 1 October when the new price cap comes into force, consumers will still be paying double the amount than they were last year.

Speaking ahead of the government's announcement later today unveiling its plans to limit energy bills, Secretary of State for Levelling Up, Housing and Communities Simon Clarke, says the plan will be "a major intervention" from government to make sure families and businesses across the country have "a lasting solution that will provide real comfort".

He says he is unable to provide details prior to the announcement, but says the plan will provide a "lasting framework" to be able to address the economic situation in the months ahead.

Asked whether the strategy takes too much of a broad-brush approach, rather than a targeted one, he insists the strategy is "the best way" to deal with the crisis, adding that "it will allow us to avoid returning to the problem every few months."

He adds that there are other planned programmes of financial help for people already struggling, which is already set out for the autumn.

"There is a lot coming down the financial track which is pre-programmed, landing in people's bank accounts, so it's vitally important we factor that in to people's understanding as well," he says.

Image source, PA Media

Our business editor Simon Jack has been explaining what we can expect today from Liz Truss's plan to deal with rising energy costs.

He says:

• The £3,549 price cap due to come in October is expected to be reduced to around £2,500
• A £400 payment for all households to help with energy bills will go ahead as planned from October
• There may also be a VAT cut on energy bills. Households pay 5% VAT on energy while businesses pay 20%

• These measures mean a lot of people's bills will be similar to what they have been since April at £1,971

• Plans for businesses are less clear, but we know that they are going to lower and fix costs by setting the per unit cost of energy
• This is a "big intervention" - but there's a question for how long it will last

It is difficult to calculate how much the price controls will cost because it depends on how long they will be in place for. Some estimates say this could cost as much as £150bn and the government is expected to borrow to fund the plan.

Simon says the support measures will be largely untargeted, meaning that everyone - rich and poor - will receive the same type of relief.

The government's borrowing to pay for this will add a big chunk of change to the national debt, he adds.