Government trying to deploy the limits of its powers to massage down an inevitable inflationary spikepublished at 13:52 GMT 24 March
Faisal Islam
Economics editor
The approach to “price gouging” and “profiteering” from the chancellor is rather striking.
It was just last year that the competition authorities were given a dressing down for getting in the way of business growth. Government ministers effectively ousted the chair of the Competition and Markets Authority (CMA)
Now the CMA is being beefed up with new powers, at least temporarily, to target profiteering and limit price rises.
The CMA has already stepped up statutory monitoring of fuel prices, according to the chancellor and will now “monitor the cost of household essentials for price rises and disruption”.
The Chancellor is also calling in the supermarkets and banks for a roundtable.
What does this mean in practice? The cost of crude oil, natural gas, and of long term borrowing have all gone up sharply since the war began meaning inevitably higher petrol, energy and mortgage costs for consumers.
In petrol, in practice, the CMA’s powers appear to be fines, if retailers do not comply with new price transparency initiatives.
This seems to be an effort to communicate an intense governmental and regulatory glare on these processes, which could limit any excessive attempt to gold plate these rises in costs. The chancellor did not actually assert that this had definitively occurred yet.
All of this comes just as the impact of the government’s conscious attempt to manage down the inflation rate this year will be seen in the price of prescriptions, rail fares and the overall inflation rate.
The energy shock will upend these numbers. The government is trying to deploy the limits of its powers to massage down an inevitable inflationary spike.
