Healey Warns Retailers Not to Profit from Conflict

UK Chancellor John Healey has warned retailers not to take advantage of the ongoing conflict in the Middle East and its impact on prices. In a column for The Sunday Telegraph, he stated that the government is watching closely for any signs of profiteering by big retailers.

The conflict's effect on oil and gas prices has reignited concerns about inflation, with the Bank of England warning last week that a further escalation in the Iran war could push UK inflation above 4% next year. A report from EY also warned that the UK economy could fall into recession if the Strait of Hormuz remains closed until early or mid-2027.

The EY report predicted that the UK GDP would slow sharply to 0.5% this year and contract by 0.2% next year if the conflict continues. However, if the strait reopens by the end of the third quarter of this year, growth is expected to remain relatively resilient at 0.9% in 2026 and 1.2% in 2027.

The comments from Healey have sparked a new row with retailers, who argue that supermarkets operate in a highly competitive environment and that government action has kept food prices as low as possible. The British Retail Consortium suggested that the government should instead focus on the effect of tax increases on inflation.