Rising energy bills: France to keep price cap in 2023

In January the French government forced state-owned energy provider EDF to cap price rises at 4% for a year. The measure has already stopped prices from increasing by 40% and has kept inflation lower in France than in many other countries – but it has cost the state €24billion.

France is to maintain its energy price cap into 2023 so as to continue to ‘protect the purchasing power of people in France’, the budget minister has said.

Gabriel Attal, former government spokesperson and now minister of public action and accounts, made the announcement on Saturday, September 3.

The typical German or Italian household, for example, is currently paying more for their energy than the typical UK household. It is also worth bearing in mind that energy tariffs in the UK are traditionally lower than in continental Europe - it is just that UK households tend to consume more energy due to the UK's older, draughtier housing stock.

France is something of an outlier because the vast majority of its energy comes from nuclear - so it is less exposed to higher gas, oil or coal prices.

France is an outlier in that it is nationalising EDF, its main electricity provider, but that is mainly because that company (which has always been state-controlled) is a debt-laden basket case facing vast capital expenditure in the coming years because Mr Macron wants a vast roll-out of new nuclear power plants.

That kind of expenditure can only be back-stopped by French taxpayers. And note that France is not taking the same approach with its gas suppliers. Nor are comparable economies like Germany.