Chancellor John Healey has issued a fiery warning to supermarket bosses and petrol forecourt operators, vowing not to let British shoppers be taken "for a ride" as Middle East tensions threaten to send grocery bills soaring.
Healey said he is keeping a hawk's eye on the high street and petrol forecourts for "any suggestion" of "price-gouging", as escalating conflict in the region hits global supply lines. He promised to get tough on any retailers attempting to exploit the situation at the till or the pump, making clear that industry watchdog bodies hold sweeping powers to punish offenders.
"We'll be watching closely for any suggestions that customers are being taken for a ride at the pump or the till," he wrote in The Telegraph.
"Companies' willingness to work with the Government throughout this crisis has been positive, and there has been no significant evidence of so-called price gouging, but I want to be blunt in reassuring the public that our regulators have the powers to clamp down on it if it happens."
Fuel prices surge after Strait of Hormuz closure
The soaring oil and fuel prices - sparked after Tehran blocked the Strait of Hormuz - are threatening to obliterate Prime Minister Andy Burnham's pledge to grant hard-pressed families "breathing room" after years of cost-of-living agony. According to the RAC, petrol prices have already surged to 160p per litre, the highest level seen since 2022 when Russia invaded Ukraine.
The spike in energy costs is expected to hit transport logistics and agricultural fertilisers hard, directly feeding back into store prices. Addressing the British public, Healey warned of the tough financial climate ahead, admitting the Treasury cannot fully cushion families and businesses from a global shock of this scale. He acknowledged widespread anxieties over rising energy bills, petrol prices and weekly grocery costs.
However, the Chancellor insisted he remains confident in the nation's resilience, pointing to "British grit" and community spirit to see the country through the crisis.
Autumn Budget crunch looms
Healey's comments come amid growing anxiety over his upcoming autumn Budget, with experts warning his fiscal manoeuvrability is rapidly shrinking. While Healey and Burnham previously agreed on a £23.6 billion buffer to satisfy self-imposed borrowing rules, market analysts warn that a toxic mix of higher borrowing costs, energy price surges and sluggish growth could halve that total.
That pressure is compounded by the subsequent announcements of a £2 cap on bus fares, a 5% cut in VAT on energy bills and a reduction in business rates for pubs. Despite the looming crunch, the Treasury has insisted it will "always put the interests of the British people first," no matter what "is thrown at us in this dangerous new world," Healey told The Telegraph.
Former Chancellor Rachel Reeves previously tried pressuring supermarkets to cap food prices, but dropped the idea after fierce backlash. Industry bosses, including M&S chief Stuart Machin, branded the plan "preposterous," while Bank of England Governor Andrew Bailey warned it was unsustainable and would backfire.
