Danish lawmakers on Friday agreed an aid package to soften the blow from rocketing energy prices, including a cut to a levy on power prices and cash handouts to families with young children, going against a stark warning from the country's central bank.

Denmark is, like the rest of Europe, grappling with how to help households and companies deal with rising consumer prices seen in the wake of the pandemic and Russia's invasion of Ukraine, which is hurting both consumers and businesses.

"The agreement does not solve all problems, but can provide more security over the winter," Finance Minister Nicolai Wammen said in a statement.

The country's central bank warned earlier this week not to cushion against higher energy prices by cutting levies, since this would result in even higher prices and discourage saving on energy. (Reporting by Jacob Gronholt-Pedersen and Nikolaj Skydsgaard, writing by Stine Jacobsen, editing by Terje Solsvik)