Boardrooms of British oil and gas corporations shivered as the government hinted at plans to tighten its grip on their profits.
The Chancellor of the Exchequer, Nadhim Zahawi, and the Business Secretary, Kwasi Kwarteng, have invited the heads of the major energy companies to a meeting today to explain their astronomical profits in light of soaring energy costs.
Even though many consumers are forced to pick between heating and eating, businesses have been raking in the revenue.
This year, oil and gas companies have already paid a temporary windfall tax on North Sea operations revenues. They are concerned that the 25 percent capital gains tax rate could be increased.
Reportedly, the Treasury is eager to address loopholes in the proposed fee to generate an additional $5 billion or more. Education Secretary James Cleverly made the rounds of television interviews, pledging that Zahawi and Kwarteng will “beat some heads together” and hold energy firms accountable.
It comes as energy market analysts Cornwall Insight upped their projections for average annual energy bills this week, saying that they might reach over £3,500 in October and over £4,200 in January.
It appears that the government would rather that someone else foot the tab for handouts, despite rising pressure on it to assist hard-pressed consumers. BP down 0.3%, or 1.3p, to 421.25p, while Shell dropped 0.7%, or 15p, to 2169.5p.
British Gas owner Centrica was among the worst performers on the Footsie, down 5.5%, or 4.6p, to 79.52p. Elsewhere in the utility sector, Drax fell 5.5%, or 43p, to 736p; SSE fell 2.4%, or 43p, to 1767p; and National Grid fell 1.2%, or 13.5p, to 1139p.
The FTSE 100 increased 0.25 percent, or 18.96 points, to 7507.11, but the FTSE 250 surged 1.94 percent, or 385.6 points, to 20,286. The share price of promotional items distributor 4imprint increased by 10.8 pence, or 360 pence, to 3,710 pence after the release of strong half-year results.
In the first half of the year, demand was at record levels, and July’s activity was promising.
Half-year revenue increased by 58% to £420 million.
TP ICAP, a financial middleman that conducts transactions for City institutions such as investment banks and hedge funds, rose 13.6%, or 18p, to 150.5p after reporting a strong increase in half-year profits from £28m to £72m.
Michael Spencer, the billionaire former Conservative Party treasurer, founded the corporation.
He is no longer active with the company, but it is operating well without him, benefiting from increased trading activity and volumes, which are essentially the result of monetary policy tightening to combat record inflation, the war in Ukraine, and global recessionary threats.
Amid a deluge of business updates from insurance companies, Admiral’s 12.6%, or 248.5p, increase to 2,216p stood out.
The profit for the first half of the year decreased by half, to £251 million, compared to the same period a year earlier. However, it was observed that 2021 was an extraordinary year, and profits were up 19 percent compared to pre-Covid 2019. Despite what Admiral claimed were “substantial rate hikes” in its UK vehicle business in reaction to elevated claims inflation, customer numbers increased by 12% annually.
Wealth management Quilter cautioned that current market conditions may cause a delay in achieving its operating margin goals.
The shares fell 3.3%, or 3.95p, to 115.8p yesterday after the company announced that it was facing its most challenging market environment since it went public in June 2018.
