Downing Street is 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.
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.”
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.
Quizzed on the report on Sunday, Health Secretary Steve Barclay said there would be no “element of compulsion” if the Government decides to encourage supermarkets to impose price caps on food staples.
He told the BBC’s Sunday With Laura Kuenssberg show: “My understanding is the Government is working constructively with supermarkets as to how we address the very real concerns around food inflation and the cost of living, and doing so in a way that is also very mindful to the impact on suppliers.”
Mr Barclay acknowledged small family-run businesses would themselves be under “significant pressure” and stressed that the plans were “not about any element of compulsion”.
