- Aug 4, 2022 11:06 am GMT
FT published - AUGUST 3 2022 - The IMF has urged European governments to pass on rising energy costs to consumers to encourage “energy saving” and a shift towards greener power while protecting poorer households.
European governments which have tried to shield households from soaring costs with price controls, tax cuts and subsidies “should allow the full increase in fuels costs to pass to end users to encourage energy saving and switching out of fossil fuels”, the assistant director in the IMF’s European department said.
Energy consumer prices are rising at an annual rate of nearly 40 per cent in the eurozone and 57 per cent in the UK, reflecting the surge in wholesale gas and oil prices after Russia’s invasion of Ukraine. That is drastically eating into households’ disposable income.
Poorer households, which spend a larger share of their money on electricity and gas, are particularly hard-hit.
As a result, the IMF urged a government policy shift from broad-based support measures to targeted relief.
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