Chancellor John Healey has revived threats against retailers over profiteering as his cost of living options have narrowed due to problems facing the country’s public finances. Healey warned supermarkets that they would not be able to take Britons “for a ride” as the Treasury would closely monitor “any suggestion” that shoppers were suffering from large price hikes. His messaging around the government’s support over the cost of living has also shifted slightly as he said the government “can’t completely stop” pressures facing families and Britons as a result of the Iran war and breakdown of trade across the Strait of Hormuz.
Healey follows his predecessor Rachel Reeves in challenging the private sector to resist large price rises even as businesses struggle to stay afloat through the Iran war. Petrol forecourt retailers previously hit out at Reeves’ “inflammatory language” on profiteering as businesses said there was little to no evidence of price-gouging taking place as a result of the war.
The British Retail Consortium (BRC) stated that the UK retail sector has low profit margins and that competition keeps food prices down. The BRC cited multiple reports from the Competition and Markets Authority (CMA) that found no evidence of profiteering by British grocers. The BRC argued that government policies, including National Insurance contributions and packaging taxes, contribute to retailer costs. Food inflation has recently fallen to 1.7% despite fears of price surges due to the Iran war.
