PM and chancellor warn supermarkets over food prices as shoppers battle inflation

Supermarkets have been warned to act “responsibly and fairly” when it comes to pricing as people battle inflated costs on their weekly food shop..

Rishi Sunak said he wanted to see the “easing" of weekly shopping bills as Chancellor Jeremy Hunt confirmed ministers are talking with the food industry about prices.

The remarks by the top two government figures come after the Bank of England governor Andrew Bailey suggested some retailers were raising prices as a way of increasing their profits.

The Bank, on Thursday, announced a shock interest rates hike to 5% as inflation remained steadfast across April and May.

The Consumer Prices Index (CPI) inflation remained at 8.7% despite forecasts it would fall.

Addressing workers at a warehouse in Dartford, Kent, Mr Sunak said he recognised household weekly shopping bills had “gone up far too much in the past few months especially.”

He added: “We’re looking at the supermarkets, making sure that they’re behaving responsibly and fairly when it comes to pricing all those products, to make sure that we’re easing the burdens on your weekly shop.”

It comes after Mr Bailey, in a letter to the chancellor following the rate rise announcement, said some shops might be “rebuilding” their profit margin by passing inflation costs to consumers via increased prices.

“The continued pass-through of costs to consumer prices may also be indicative of some rebuilding of profit margins by retailers,” the governor said.

But the governor appeared to suggest the practice was not widespread among retailers or wholesalers.

In his reply, Mr Hunt noted the Bank’s observation before adding: “The government is focusing on measures that help to tackle increasing costs in the food sector and we will continue to engage with the food supply chain on potential measures to ease the pressure on consumers.”

The thinly veiled plea to the retail industry not to hike prices further follows warnings about struggling household finances during the cost-of-living crisis, which is being driven by inflation.

Figures from the Money Advice Trust show that since March 2022 the number of adults who are behind on one or more household bill has risen from 7.9 million to 11.6 million.

And Office for National Statistics (ONS) data published on Wednesday showed the increase in food prices slowed between April and May after reaching a 45-year high in March, it remained at 18.4% last month.

According to analysis by the Labour Party, the average UK household is paying more than £1,000 per year extra for food than in 2020/21, with Britain experiencing faster price rises than G7 counterparts, including Germany and the US.

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