The British Retail Consortium (BRC) has warned that the latest government plans to introduce price caps on basic food items in a bid to tackle the cost-of-living crisis will “not make a jot of difference to prices”.

Downing Street is “drawing up plans” for retailers to introduce price caps on essential food items including bread and milk, as first reported by The Telegraph.

The price cap on basic food items is reportedly at a “drawing board stage” and according to reports there are currently no plans for the introduction of a mandatory price cap.

The government emphasised that retailers would have the freedom to choose which items would be capped, mirroring the voluntary agreement operating in France.

Retail Week understands that government ministers are yet to meet with supermarket leaders to discuss the implementation of an initiative.

BRC director of food and sustainability Andrew Opie said that the government should be focusing on cutting red tape so that resources can be directed to keeping prices as low as possible, rather than “recreating 1970s-style price controls”.

Opie added: “This will not make a jot of difference to prices. High food prices are a direct result of the soaring cost of energy, transport and labour, as well as higher prices paid to food manufacturers and farmers.

“Yet despite this, the fiercely competitive grocery market in the UK has helped to keep British food among the most affordable of all the large European economies.

“Supermarkets have always run on very slim margins, especially when compared with other parts of the food supply chain, but profits have fallen significantly in the last year.

“Even so, retailers continue to invest heavily in lower prices for the future, expanding their affordable food ranges, locking the price of many essentials and raising pay for staff.

“As commodity prices drop, many of the costs keeping inflation high are now arising from the muddle of new regulation coming from the government.”

This follows the latest research by the BRC and Nielsen, which showed that food inflation recorded in May was up by more than 15% year on year, as well as being the second-fastest annual increase ever measured.