The Treasury is planning a wider £40bn windfall tax on energy companies over five years, according to reports.
Prime minister Rishi Sunak and Chancellor Jeremy Hunt plan to increase the tax rate to 30% from 25%, expand the scheme to include electricity generators, and extend the levy to 2028, the Times has reported.
The existing scheme is set to end by 2026. Extending it in this way would potentially increase revenues by 50% to £40bn, though the volatility of gas prices makes this uncertain.
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BP's results on 1 November showed that business is booming at the oil and gas giant. Underlying operating profit was $8.2bn - almost 2.5 times higher than last year.
It has announced a $2.5bn extension to its share buyback programme which makes the full year total $8.5bn.
Shell, which released its results on 27 October, also announced a $4bn buyback programme and proposed a 15% increase for the fourth quarter dividend. Its shares were up 1.5% following the announcement
Meanwhile, big spending cuts and tax rises are expected from the government, as it seeks to raise £50bnfrom either tax cuts or spending cuts to meet deficit targets.
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Later today (3 November), the Bank of England is expected to increase interest rates by as much as 0.75%, the biggest single move since Black Wednesday in 1992, bringing it to the highest interest rate for 14 years.
Autumn Budget day is set for 17 November. The chancellor is expected to submit key proposals to the Office for Budget Responsibility by the end of this week to give it time to make its independent assessment.
The prime minister is understood to be still undecided on two controversial policies, breaking the pensions triple lock and cutting benefits in real terms.
Asked yesterday if he would keep a promise he made in the House of Commons in May, when he was chancellor, to retain the triple lock - raising the state pension by the higher of earnings, inflation, or 2.5% - he declined to confirm his commitment.
