PARIS (REUTERS) - The French government took a step forward on a key re-election promise to boost household purchasing power amid soaring inflation as the National Assembly passed a Bill on Friday (July 22) lifting pensions and temporarily freezing rent hikes.

In a first test of President Emmanuel Macron's ability to reach compromises across party lines after losing an absolute majority in recent elections, the Bill next goes to the Senate, the Upper House dominated by the conservative Les Republicains.

The draft law also includes a pay rise for public sector workers, food cheques and a mechanism for companies to make higher tax-free bonus payments to employees.

The expected budget cost is about 20 billion euros (S$28.33 billion).

Helping the French cope with a higher cost of living, mainly driven by soaring energy prices after Russia's invasion of Ukraine, was one of Mr Macron's key promises after his first term saw street protests that drew fame as the yellow-vest movement.

Last month, France saw inflation of 6.5 per cent on the year, in line with other euro zone countries.

The late-night vote followed heated debates in which politicians of the left-wing Nupes alliance, the largest opposition bloc, criticised the government for measures they said did not go far enough.

Securing 341 votes for the Bill, with 116 against, the government was backed by Les Republicains and the far-right Rassemblement National, while Nupes lawmakers did not vote for it.