Liz Truss's plans for an energy price freeze might cap bills and help inflation according to economists.
The new PM is tipped to announce the plans on Thursday in what would be her first major policy initiative on just her third day in 10 Downing Street.
Under the freeze, energy suppliers would provide gas and electricity at capped rates.
It would effectively mean no further rises on the current energy price cap rate of £1,971, with movements in the wholesale cost of gas seemingly absorbed by the government as suppliers would be reimbursed.
Households would also avoid the 80% hike to over £3,500 per year scheduled for October and announced by regulator Ofgem just over a week ago.
The policy would likely cost about £130bn over the next 18 months, Bloomberg reported, on top of the £37bn cost-of-living support package that will see the poorest homes receive up to £1,200 each, with £400 for all households.
Some suggestions are that the cap might be set at around £2,400 for homes and small businesses, with it falling down to the current level once all households receive their £400 grant.
Either way, it would mean domestic suppliers selling energy at approximately the current capped rate of just under £2,000 for the indefinite future even though some predictions are for gas prices over the winter to climb to a level equivalent to £5,000.
Costs might be clawed back through future bills, though details on this so far remain sketchy.
One benefit for Truss is that capping the cost of energy would have a knock-on effect on inflation.
Samuel Tombs at Pantheon Macroeconomics believes inflation could fall from its 40-year high of 10.1% to the Bank of England’s (BoE) target of 2% in the second half of next year thanks to the freeze.
Neil Shearing, Capital Economics group chief economist, thinks inflation would instead peak at 11% in October, rather than 14.5% in January as he currently forecasts.
It could also reduce the severity of the looming recession and ease pressure on the BoE to hike interest rates aggressively at its meeting next week.
Other plans
A freeze is expected to be in addition to a wider energy plan that includes further North Sea oil and gas exploration, as well as decoupling gas prices from the cost of cheaper renewable energy including wind and solar.
Truss has been contemplating a reduction in VAT to 15% from 20% to help consumers and businesses, which would dent government revenues by £38bn per year, IFS said.
She may also extend the cut in fuel duty, that was scheduled to end in March, and cancel the planned rise in corporation tax - to 25% from 19% - next April.
There is also talk of raising the personal tax-free allowance, with the point at which people pay 20% and 40% of their incomes likely to be upped.