London-listed energy firms shook off concerns over the impact of a looming windfall tax on their excess profits during opening exchanges this morning.
The capital’s premier FTSE 100 index edged 0.09 per cent higher to 7,529.53 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, jumped 0.22 per cent, but was still below the 20,000 mark.
Chancellor Rishi Sunak is today set to announce a one-off levy on profits booked by oil and gas and possibly electricity firms that have been super-charged by Russia’s invasion of Ukraine sending energy prices soaring.
Despite the looming tax grab, oil giants BP and Shell were among the biggest risers on the FTSE 100, each adding more than one per cent.
However, electricity and renewable energy providers listed on the top index continued their whipsawing week.
SSE has swung from sharp losses at the start of the week to a strong gain yesterday. But, it shed nearly three per cent during the opening session today.
Reports in the Financial Times earlier this week indicated the chancellor was mulling incorporating other energy firms in the windfall tax, prompting investors to ditch shares in the likes of Drax Group and SSE.
Sunak is seeking to transfer excess profits made by energy firms from the highly volatile global oil and gas market to households that are struggling under the weight of the cost of living crunch.
The energy watchdog this week said average bills will climb another £800 in October, taking the average bill to £2,800, representing a 119 per cent rise in just a year.
FTSE 250-listed contractor Serco was the top riser on the index, surging nearly 10 per cent after it hiked profit forecasts this morning on a boost in immigration work.
The pound was broadly flat against the dollar.
Yields on UK government debt inched down, signalling investors are scaling back bets on the Bank of England pushing through more rate hikes over concerns too restrictive monetary policy will tip the economy into a recession.