The Treasury is reportedly urging supermarkets to voluntarily limit price rises on essential food items such as bread, eggs, and milk, as fears of a potential war with Iran threaten to exacerbate the cost of living crisis. According to sources, the government hopes that by capping prices, it can shield households from further financial strain.
Government Concessions in Exchange for Price Caps
In return for agreeing to price caps, the government might offer concessions including easing packaging regulations and delaying changes to healthy food rules for retailers. This initiative is part of a broader effort to combat rising inflation, which has already forced millions of UK households to skip meals.
Supermarket Bosses Criticise Proposal
Supermarket bosses have criticised the proposal as “desperate” and “mad,” comparing it to failed price controls from the 1970s. They warn that such measures could force retailers to sell goods at a loss, potentially leading to shortages and reduced choice for consumers.
The Treasury’s push comes amid warnings that price hikes due to a potential Iran conflict could last for at least eight months after the war ends. The Chancellor is expected to announce further measures on Thursday to address the ongoing cost of living crisis.
