The government will borrow a further £70bn over the next few months to fund its massive support for household and business energy bills.

The combined energy programs will cost around £60billion in the first six months, the Chancellor announced on Friday.

The Business Relief Scheme, which gives businesses a cut on their bills, will cost around £29billion over the period.

Meanwhile, Support for Ordinary People, which caps bills at £2,500 for the average household – although your bill may be higher or lower if you use more or less energy than average – will cost £31billion , according to current projections.

However, these forecasts are highly uncertain as they depend on the evolution of gas price volatility over the coming months.

“The House should note that the estimated costs of our energy plans are particularly uncertain, given the volatility of energy prices,” Kwarteng told MPs on Friday.

“But based on recent prices, the total cost of the energy package, for the six months from October, is expected to be around £60bn.

“We expect the cost to come down as we negotiate new long-term energy contracts with suppliers.”

The government will look to international borrowing markets to find the roughly £72.4bn it needs to cover the cost of energy policies and its tax cuts.

It will lose more than £2billion each year due to its plans to scrap the top 45 cents of the UK personal income tax rate for income above £150,000.

Plans to cancel the planned rise in corporation tax from 19% to 25% will cut Treasury tax levies by more than £12billion next year, to £19billion by by 2026, the government said.

Governments borrow money by selling gilts, a kind of IOU, on international markets. Anyone can buy them, for example through premium bonds, but most buyers are banks, pension funds and other large institutions.

As with most loans, the government agrees to repay what it borrows, plus interest.

Earlier this week, the Office for National Statistics revealed that borrowing was much higher than expected in August.

The government borrowed £11.8billion last month to meet soaring interest charges on its loans.

Many of these loans are linked to inflation.

But the government now claims that by supporting households it will reduce inflation by around five percentage points.

This in turn will make it cheaper for him to borrow money.