Prime Minister Rishi Sunak is proposing a form of price caps on basic food items like milk and bread to slow their price increases. This is likely to set maximum prices which sellers are not allowed to exceed, though it appears it would be voluntary.
Price caps are loved by the public: 71% of UK voters supported them in a 2022 poll. But they are equally hated by economists: 75% oppose price caps even in emergency situations, according to another 2022 poll. Why is there such a divide? What are the downsides of price caps?
The UK government is reportedly considering a plan akin to what France did in the spring, where supermarkets were invited to voluntarily freeze or cut prices on selected items to the lowest level possible.
