UK Prime Minister Liz Truss says the government will freeze domestic energy prices for homes and businesses to ease the cost-of-living crisis, the AP reports.

She also said she would approve oil drilling in the North Sea and lift a ban on fracking to boost Britain's domestic energy supply.

She said a two-year energy price guarantee meant that average household bills would be no more than 2,500 pounds a year for heating and electricity. Bills were expected to rise to £3,500 a year from October, three times what they were a year ago.

Businesses and public institutions such as hospitals and schools will also receive support, but for six months rather than two years.

The government says the restriction will reduce the rapid rise in inflation in the U.K. by 4-5 percentage points. Inflation reached 10.1% in July and is projected to rise to 13% by the end of the year.

These moves represent a massive government intervention in the economy. Truss says she prefers tax cuts to handouts, but the magnitude of the crisis has forced her to act.

The government has not said how much the price cuts will cost, but it is estimated to exceed £100 billion. Truss rejected opposition calls for an additional tax on the profits of oil companies. The restriction would be paid for with Treasury and borrowed funds.

The opposition Labor Party says this means that British taxpayers will have to pay the bill.

Britain imports most of its natural gas, mostly from Norway, and is therefore vulnerable to changes in world prices.

Truss also said it would issue more than 100 new drilling licenses in the North Sea and lift the UK's ban on fracking. Both measures will be denounced by environmentalists, who fear that Truss may abandon Britain's legally binding commitment to reduce carbon emissions to zero by 2050.