As UK fights inflation, Rishi Sunak and co must take hard line on profiteering amid the cost of living crisis – Scotsman comment

Former Chancellor Norman Lamont, no stranger to struggles with high inflation, spelt out what that would mean, warning that “a fall in living standards is inevitable… nobody wants a recession, but some slowdown – hopefully not a recession – is necessary”. Speaking to the i newspaper, he also urged the government to avoid the temptation to respond to increases in interest rates with counterproductive measures designed to “mitigate the impact”.

The recent interest rate increases look set to continue with some economists warning they may need to go as high as 7 per cent. However, there are other tools that could be used to cut inflation. Andrew Bailey, the Bank of England’s governor, said there were signs of customers being overcharged by some retailers and that intervention by government regulators, particularly in relation to fuel prices, could make a difference. “That's important. It helps us with inflation, but it's just fairer if these things are tackled,” he told the BBC. “This is having very difficult effects.”

Earlier this week, Grant Shapps, the UK Energy Secretary, accused fuel retailers of using motorists as “cash cows” after the Competition and Markets Authority found that leading suppliers had taken a decision “to compete less hard”.

It is reasonable for businesses to put up their prices when their costs have gone up. But doing so simply to increase profits at a time of national crisis, when many people are struggling to get by, is shocking behaviour. That this could be happening on a scale large enough to affect the UK’s inflation rate is disheartening. As living standards fall further, Sunak and co must take steps to bring companies engaging in any such profiteering firmly into line.