A City analyst called the plan 'mad' and 'neo–Soviet,' while the Bank of England governor Andrew Bailey warned it would not be sustainable in the long run.
Rachel Reeves suffered a major backlash on Wednesday over her 'completely preposterous' plan to cap food prices. Marks & Spencer , the Bank of England and the CBI hit out at the Chancellor's suggestion that stores limit the price of essentials such as eggs, bread and milk.
The proposal was described as 'mad' and 'neo–Soviet' by one City analyst, while Bank of England governor Andrew Bailey told MPs price caps were 'not sustainable' in the long run. M&S chief executive Stuart Machin said ministers should instead consider reversing the tax and red tape burdens they are piling on to firms which are driving up costs.
'It's completely preposterous,' he added. 'I don't think the Government should be trying to run business. I think they should be trying to probably understand business better.
' Retailers, he said, are already working to keep prices down at a time when businesses are facing a 'triple whammy' of higher costs from tax, red tape imposed by the Government, and disruption caused by the Iran war. The row overshadowed better than expected figures showing inflation fell from 3.3 per cent in March to 2.8 per cent in April.
Hours later, Mr Bailey gave the cold shoulder to Labour's price cap idea as he was questioned by MPs on the Treasury select committee. He said: 'If you start doing it as a matter of course then effectively you're artificially moving prices relative to costs and that's not a sustainable thing.
Backlash Marks & Spencer Bank Of England CBI Food Price Cap Plan Neo–Soviet Andrew Bailey Inflation Food Inflation Triple Whammy Stewart Machin Louise Melllem Clive Black Dan Tomlinson
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