Middle class feels higher energy prices the most | Money

Research by KU Leuven shows that the average energy bill for families with a variable contract in January was no less than 226 euros higher. However, the impact is greater for the lowest incomes. They have to spend on average 11.3 percent of their budget on heating and electricity, compared to 7.3 percent previously. For the highest incomes, the share of the family budget rises from 2.3 percent to 3.8 percent.

On the other hand, the scientists look at the impact of the compensatory measures. According to the researchers, the automatic index is a very effective instrument, but it mainly caters to the highest incomes (+273 euros per month family budget). And much less the lowest income classes (+71 euros).

For the lowest incomes, the social rate is the main price damper. For example, the lowest incomes who receive a social rate pay 37 euros less for their energy bill than families with the same budget without this allowance. The temporary VAT reduction for electricity is less effective, the researchers say. In addition, it lowers the automatic index, which partially negates the effect of the lower VAT.

All in all, the loss of purchasing power is greatest for the middle class, because it benefits least from the existing compensation. In households with a variable contract, 38 percent will lose purchasing power with the current measures. Ten percent of middle-class households – if they do not change their energy consumption – will have to pay at least 220 euros or more per month.

INTERVIEW. CEO of Fevia, the Belgian food industry federation, predicts even higher prices: “Whether it’s bread, meat or beer. Nothing and no one escapes it” (+)

Government is looking for an energy agreement today: everyone seems to go to 6% for VAT on gas (but for how long?) (+)

Also see: Vooruit wants to knock on Monday VAT reduction for energy