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Jeremy Hunt to meet CMA, Ofgem, Ofwat and Ofcom over ‘profiteering’ concerns

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The Association of British Insurers has called on Chancellor Jeremy Hunt to cut the tax levied on insurance premiums.
The insurance industry’s trade body has called on Chancellor Jeremy Hunt to cut the tax levied on insurance premiums.

Jeremy Hunt will ask industry regulators what they are doing about any companies exploiting rampant inflation by raising prices.

The Chancellor is set to meet the Competition and Markets Authority (CMA), and the watchdogs for energy, water and communications on Wednesday.

He will press them on whether there is a profiteering problem in their sectors and what they are doing about it, according to a Treasury source.

The meeting with the CMA, Ofgem, Ofwat and Ofcom comes after the Bank of England suggested some retailers were jacking up prices or failing to pass on lower costs to consumers as a way of increasing their profit margins at a time of stubborn inflation.

This comes after Hunt met the bosses of major banks and lenders on Friday in a bid to cool the mortgage crisis.

Prime Minister Rishi Sunak warned retailers about pricing “responsibly and fairly”, saying household weekly shopping bills had “gone up far too much in the past few months”.

Mr Hunt also confirmed that ministers were talking to the food industry about “potential measures to ease the pressure on consumers”.

But the comments sparked a backlash from the industry, with the British Retail Consortium, the trade body representing the sector, saying there had been a “regular stream of price cuts” by supermarkets despite experiencing “extremely tight” profit margins.

It followed official figures last week that showed consumer prices index inflation failed to ease as hoped in May, remaining at 8.7%.

The Bank of England subsequently raised interest rates to a 15-year high last week in a shock move designed to tame inflation.

Mr Sunak on Sunday urged cash-strapped Britons to “hold our nerve” over high interest rates as he stressed “there is no alternative” to stamping out inflation.

He said “inflation is the enemy” as he defended the Bank of England’s rate hike, even as it piled pressure on mortgage-holders.

The Chancellor last week agreed measures with banks aimed at cooling the mortgage crisis, including allowing borrowers to extend the term of their mortgages or move to an interest-only plan temporarily.

Press Association – Sophie Wingate