UK supermarkets are being urged by the Government to limit food prices after food inflation rose to 3.7% in April, it has been claimed. Reports are suggesting the Treasury asked supermarkets to limit food prices in return for the lifting of some regulations.

According to the Financial Times, the proposals would see shops voluntarily cap the prices of essential groceries such as eggs, bread and milk. The Government "must focus on how it will reduce the public policy costs which are pushing up food prices", the British Retail Consortium (BRC) said.

A spokesperson for HM Treasury said: "The Chancellor has been clear we want to do more to help keep costs down for families, and will set out more detail in due course."

The Financial Times also reported that the Treasury has said it would in return offer supermarkets "incentives" which may include easing packaging policies and delay potentially costly changes to healthy food rules, the newspaper said.

Helen Dickinson, the chief executive of the BRC, the leading trade association for retailers, said: "Rather than introduce 1970s style price controls and trying to force retailers to sell goods at a loss, the Government must focus on how it will reduce the public policy costs which are pushing up food prices in the first place."

She added: "The challenge facing retailers is a combination of higher energy and commodity costs resulting from the Middle East conflict, and the soaring cost of the Government's domestic policies."

"The UK has the most affordable grocery prices in Western Europe thanks to the fierce competition between supermarkets," she also said.

A spokesperson for the Treasury said: "The Chancellor has been clear we want to do more to help keep costs down for families, and will set out more detail in due course."

According to these reports, the Government has also recommended supermarkets reinvest the savings from the regulation changes to freeze grocery prices.

This comes after UK food inflation rose to 3.7% in April. The Foreign Secretary on Tuesday told an aid summit of the risk of "sleepwalking into a global food crisis" as a result of Iran's blockade of the Strait of Hormuz.

Chancellor Rachel Reeves is to set out measures to help households with the cost of living on Thursday.