Labour energy price freeze plan wipes $4.3bn off British utilities
September 26, 2013 - 2:51:43 pm
LONDON: British utilities Centrica and SSE have lost 2.7 billion pounds or $4.34 billion in market value since opposition Labour leader Ed Miliband promised on Tuesday to freeze energy prices for 20 months if he wins power in May 2015.
Seeking to convince voters he can improve their standard of living, Miliband said that energy companies had been overcharging British consumers for too long and that the energy market was not working.
"The companies aren't going to like this, because it will cost them more," Miliband told party activists in the seaside resort of Brighton in southern England on Tuesday.
A Labour source close to Miliband said the plan could cost energy suppliers 4.5 billion pounds or $7.2 billion.
"Although there remains uncertainty surrounding the detail of the policies or whether Labour will even win the next election, we believe the risk level in the sector has now substantially increased," JP Morgan analyst Edmund Reid said in a note to clients.
Centrica has lost 7.3 percent, or 1.5 billion pounds, since the market close on Tuesday while SSE has fallen, 7.5 percent, or 1.2 billion pounds, according to Reuters calculations. (Reuters)