Downing Street is believed to be drawing up plans to encourage supermarkets to introduce voluntary price caps on food staples in a bid to help with the cost-of-living crisis, according to reports emerging today.
The scheme would aim to get retailers charging the lowest possible amount for some basic products like bread and milk, the Sunday Telegraph reported. A No 10 source said the plans are at “drawing board stage” and stressed they would not involve Government-imposed price controls.
A Treasury source told the Sunday Telegraph: “Food inflation is much more resilient and difficult to get rid of than we anticipated.”
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Supermarkets are expected to be allowed to select which items they would cap and only take part in the initiative, modelled on similar agreement in France, on a voluntary basis, the paper reported.
It comes after Chancellor Jeremy Hunt backed interest rate hikes, even if they risk of plunging the UK into recession, in order to combat soaring inflation.
Though down from 10.1%, the Consumer Prices Index of inflation remains stubbornly high at 8.7%, while experts have warned that alarmingly expensive food is set to overtake energy bills as the “epicentre” of the cost-of-living crisis.
Food prices are expected to keep rising, having already increased by 19.1% in the year to March, placing additional pressure on families.
It comes as UK inflation dipped to 8.7 per cent in the 12 months to April as the measure of price rises finally slips out of double digit figures, it was revealed today.
The figure is down from the 10.1 per cent that was recorded in March, according to the Office for National Statistic (ONS), but it's still higher than forecast by economists, who had pencilled in a drop to 8.2 per cent in April. It's the first time inflation has dropped below double digits since August last year.
The ONS said the decline in inflation was driven by gas and electricity costs remaining stable in April. However even though inflation is going down, prices are still going up, just at a marginally slower rate.
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