Chancellor John Healey has pledged to prevent supermarkets from exploiting consumers during the ongoing economic strain caused by the Iran war. Healey stated he would closely monitor prices to protect the public from potential price gouging at the pump and at the checkout.

"We'll be watching closely for any suggestions that customers are being taken for a ride at the pump or the till," Healey said. He noted that while there is no "significant evidence" of widespread price gouging currently, regulators would be empowered to act if such practices emerge.

However, Healey also acknowledged the limitations of government intervention, admitting that the administration "can't completely stop the squeeze" that families and businesses are experiencing due to the global economic shock. He described the government's approach as "active" and "hands on," prioritizing "British interests firsts" and aiming to provide financial relief to those most affected.

The current economic climate has seen fuel costs surge significantly. Petrol prices have reached their highest point since 2022, with unleaded fuel costing 160 pence per liter, according to the RAC. This surge is attributed to Iran's decision to cut off access to the Strait of Hormuz, a critical route for approximately 20% of global oil and gas supplies.

Prime Minister Andy Burnham has implemented several measures to alleviate the cost of living crisis, including a reduction in VAT on energy bills and a cap on bus fares at £2 throughout 2027. Burnham has also indicated interest in further actions to reduce utility and rail fares, which he described as "outrageously high in some instances."

Healey, who is set to present his first budget on October 28, has committed to a plan based on "fiscal discipline." He and Prime Minister Burnham have reportedly agreed to include a £23.6 billion buffer against the government's borrowing rules in the upcoming budget. To manage spending, departments have been instructed to reallocate funds from less productive or legacy programs to align with the administration's current priorities.

This initiative follows a similar attempt earlier in the year by former Chancellor Rachel Reeves to pressure retailers into capping food prices. That effort faced significant opposition, with M&S chief executive Stuart Machin calling the proposals "preposterous" and Bank of England Governor Andrew Bailey deeming the idea "unsustainable."