The chancellor has ordered a crackdown on excessive prices and increased scrutiny of suppliers, following talks with industry watchdogs on the UK’s inflation problem.
Jeremy Hunt brought in the regulators for the energy (Ofgem), water (Ofwat) and telecoms (Ofcom) sectors, along with the Competition and Markets Authority (CMA) and City watchdog the Financial Conduct Authority (FCA).
The Treasury said the FCA would report by the end of July how the market was allowing savers to benefit from higher interest rates.
It also said the CMA would introduce new investigations in markets where prices were rising and speed up its reporting of grocery competition and pricing.
Ofcom has agreed to push all suppliers to introduce discounts for vulnerable broadband and mobile customers, and waive fees for customers who switch providers to access such discounts.
The regulator has also been told to ensure telecoms providers raise awareness of existing discounts and drive take-up of them.
There are concerns that some companies are boosting their profits at the expense of customers by exploiting the inflationary environment and exacerbating the cost of living crisis in the process.
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The meeting, at number 11 Downing Street, followed remarks by the governor of the Bank of England, Andrew Bailey, that there was evidence profit margins had been inflated by food producers.
Food is among the areas of the economy to be struck by stubborn inflation, with the main consumer prices index (CPI) measure failing to ease from 8.7% as expected by economists last month.
Mr Bailey, speaking after the bank opted for a tougher 0.5 percentage point interest rate hike, also hit out at unsustainable levels of wage increases to help employees avoid the impact of inflation and its own interest rate pain.
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In evidence to MPs on Tuesday, supermarket bosses denied any suggestion of profiteering but admitted wage hikes of up to 15% to retain and help workers.
They insisted shoppers had been shielded from the worst of the price increases – largely a consequence of the war in Ukraine that saw energy and many key commodity prices, including wheat, surge in wholesale value.
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The CMA could report back as early as next week on its investigation into supermarket prices for both groceries and fuel.
Any regulatory action or recommendations could yet be bolstered by the chancellor, who has threatened “potential measures to ease the pressure on consumers”.
Mr Hunt is under pressure to meet a government target to halve inflation this year and ease the pressure on household budgets ahead of the next general election.
But because inflation has proved more stubborn than had been expected, the chancellor has been forced to accept the prospect of tougher interest rate action from the Bank of England, which inflicts further pain on borrowers.
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He agreed measures with banks aimed at cooling the resulting mortgage crisis last week.
They include allowing borrowers to extend the terms of their mortgages or move to an interest-only plan temporarily.
Mr Hunt has also accused lenders of being slow to pass on interest rate rises to savers.
