Jeremy Hunt, the Chancellor, is set to engage with industry regulators to address concerns about companies taking advantage of soaring inflation by raising prices. According to a source from the Treasury, Hunt will meet with the Competition and Markets Authority (CMA) as well as the regulatory bodies overseeing the energy, water, and communications sectors on Wednesday. During these meetings, he will inquire about the existence of profiteering issues within their respective industries and the actions being taken to address them.
This series of discussions with the CMA, Ofgem, Ofwat, and Ofcom follows a suggestion by the Bank of England that certain retailers have been increasing prices or neglecting to pass on reduced costs to consumers in order to bolster profit margins amidst persistent inflation. Rishi Sunak, the Prime Minister, has cautioned retailers to adopt responsible and fair pricing practices, expressing concern over the substantial rise in household shopping bills over the past few months.
Furthermore, Hunt has confirmed that government officials are in talks with representatives from the food industry to explore potential measures aimed at alleviating the burden on consumers. However, these statements have triggered a negative response from the British Retail Consortium, a trade body representing the sector, which asserts that supermarkets have been implementing a regular stream of price cuts despite operating with extremely tight profit margins.
Recent official figures revealed that the Consumer Prices Index (CPI) inflation rate failed to decrease as anticipated in May, remaining at 8.7%. Consequently, the Bank of England made an unexpected move by raising interest rates to a 15-year high in an effort to rein in inflation.
Despite the pressure placed on mortgage holders by the rate hike, Sunak emphasized the need to remain steadfast and called on financially strained individuals in the UK to persevere. He defended the Bank of England’s decision, stressing that combating inflation is crucial and asserting that there are no viable alternatives.
Last week, the Chancellor also reached an agreement with banks to address the mortgage crisis. These measures include allowing borrowers to extend the term of their mortgages or temporarily switch to an interest-only payment plan.
