Jeremy Hunt will ask industry regulators what they are doing about any companies taking advantage of rampant inflation by raising prices.
The chancellor will meet the Competition and Markets Authority (CMA), and the energy, water and communications watchdog on Wednesday. He will push them if there is a problem in their sectors’ profitability and what they are doing about it, said the Treasury source.
The meeting of the CMA, Ofgem, Ofwat and Ofcom comes after the Bank of England suggested that some retailers were raising prices or failing to pass on lower costs to consumers as a way of increasing margins. profits amid stubborn inflation.
Rishi Sunak, the prime minister, warned retailers about pricing “responsibly and fairly”, saying that weekly household shopping charges had “increased significantly in recent months”.
Hunt also confirmed ministers were talking to the food industry about “potential measures to ease pressure on consumers”.
Their comments prompted a backlash in the industry, with the British Retail Consortium, the trade body representing the sector, saying there had been a “regular stream of price cuts” in the supermarket despite “extremely tight” profit margins.
Last week’s official figures showed consumer prices index inflation failed to ease as expected in May, remaining at 8.7%.
The Bank of England raised interest rates consecutively to a 15-year high in a shock move designed to curb inflation.
Sunak on Sunday urged cash-strapped Britons to “hold our nerve” over high interest rates as he stressed there was “no option” to eliminate inflation.
He said “inflation is the enemy” as he defended the Bank of England’s latest rate hike, even as it put pressure on mortgage holders.
The chancellor last week agreed to measures by banks aimed at cooling the mortgage crisis, including allowing borrowers to extend the term of their loans or temporarily move to an interest-only plan.