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Bloomberg
British budget grocery chain Iceland Foods saw its debt bounce off recent lows after UK Prime Minister Liz Truss finalised plans for a £40 billion ($46 billion) support package to lower energy bills for British businesses.
Iceland’s £550 million of bonds maturing in March 2025 rose by as much as 1.8 pence on the pound to a cash price of 75.75, Bloomberg data showed, moving further away from last week’s low of 73.10.
Last month, ratings agency Moody’s Investor Service cut Iceland’s credit rating and warned of further downgrades to come because of high energy costs and the impact of inflation on consumer spending. Iceland is especially exposed to refrigeration costs for its predominantly frozen food products.
Truss has also drafted plans to fix annual electricity and gas bills for a typical UK household at or below the current level of £1,971, a measure that would ease pressure on consumers.
Sterling market had tumbled in the weeks before Truss’s victory with investors wary of her plans to cut taxes despite the inflation pressures that have hit the pound. The yield that investors demand to lend to British companies has risen to its highest level in a decade.
Tens of thousands of applications for a payment-by-instalment plan have flooded into a British budget grocery chain just two weeks after its launch, as a cost of living crisis crushes UK household incomes.
Customers of Iceland Foods have sent in around 60,000 applications so far, more than the total number of loans the credit provider behind the initiative expected to offer in 18 months.