The UK competition watchdog has warned supermarkets that it will examine any attempts to rebuild profit margins after the recent fall in inflation and called on the government to reform pricing policies to help consumers.
The Competition and Markets Authority said in a report on Thursday that it had found high food price inflation was not being driven by weak retail competition, but noted that competitive pressure would be important as input costs fell.
Official data this week showed that the rate of consumer price rises declined to 7.9 per cent in June from 8.7 per cent in May, a bigger than expected drop.
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