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The Markets
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Energy

European governments fork out £700bn in energy crisis support

European governments have set aside £708bn since September 2021 to shield households and businesses against energy price rises

European governments have collectively set aside £708bn (€800bn) since September 2021 to support households and businesses during the energy crisis.

Germany has spent £239.5bn on support, the most of any European country, while Britain and Norway have dished out £91.4bn and just £7.1bn respectively, according to think tank Bruegel.

Countries have scrambled to ease inflationary pressures on businesses and households after energy prices soared on the back of hiked gas prices caused by Russia’s invasion of Ukraine.

Most of the support funding has targeted cuts to value added tax on fuels like petrol, as well as capping the retail price of energy, said Bruegel.

In the UK, the government has subsidised household bills to an annual value of £2,500 since October, paying the difference between this and regulator Ofgem’s price cap of £4,279.

Come April, the government will raise the guaranteed figure to £3,000, while Ofgem’s price cap, which determines how much suppliers can charge, is set to fall alongside gas prices, meaning public support spending will be lower.

UK borrowing hit £27.4bn in December, the highest monthly figure since records began in the early 1990s, mainly driven by energy support bills and higher interest on debts, which have risen with inflation.

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