Hunt urges supermarkets to curb price hikes

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Jeremy Hunt is stepping up pressure on the food sector to curb rising prices, ahead of data that could show food is becoming a bigger factor than energy in driving high inflation.

The UK chancellor is meeting with food producers on Tuesday to ask the industry to ease the pressure home budgetsfollowing a similar meeting between the chief treasury secretary and big supermarkets earlier this month.

However, the UK government has rejected the case either to impose price controls, as some European governments have done, or to follow France’s example of a more flexible agreement aimed at persuading supermarkets to limit the prices of some basic necessities.

However, on Monday evening, the Treasury said the chancellor was “asking food manufacturers to do what they can to support consumers,” as well as looking into price rule reforms that would make it easier for consumers to compare prices of similar products. .

Hunt will meet later in the day with the Independent Competition and Markets Authority, which is looking into unit pricing practices as part of work on the food sector that began earlier this year. The CMA is also close to concluding a study on road fuel prices in supermarkets.

“High food prices are proving to be stubborn, so we need to understand what is driving it. . . I call on industry to work with us as we halve inflationHunt said.

Official inflation data due out on Wednesday is likely to show a sharp fall in the headline inflation rate – from 10.1% to 8.4% if the Bank of England’s forecast proves correct – as the sharp increase in energy prices which required effective in April 2022 is not included in the annual calculation.

But food prices, which have already risen 19.1% over the past year, are likely to continue to rise for some time.

The Resolution Foundation said last week that this means the food price shock would now overtake the energy price shock as the main source of strain on household finances. The think-tank warned it was unclear “whether the extent of the increase was understood in Westminster”.

Supermarkets have been accused by some parliamentarians and trade unions of “profiteering” and of not having lowered theirs even as the cost of raw materials begins to fall on world markets.

However, Bank of England officials do not believe such “greed” is the reason for the UK’s persistently high inflation, given that profit margins for companies outside the energy sector are at their lowest as a percentage of the world. GDP since 2009.

Both Tesco and Sainsbury’s reported lower profits for the past financial year, and some analysts point to supermarket price cuts on staples such as milk as evidence that food inflation may start to moderate.