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Chancellor Jeremy Hunt has warned that profit increases benefit no one if they worsen inflation.
Mr Hunt said he agreed with remarks by Bank of England governor Andrew Bailey and said “margin recovery benefits no one if it feeds inflation”.
Mr Bailey has spoken out against companies raising prices, seeking to recover profits hit during the COVID-19 pandemic.
Speaking at the City of London’s Mansion House on Monday evening, Mr Hunt said the UK’s economic resilience – such as the low unemployment rate and lack of recession – is one of the reasons inflation has remained high.
“[The UK economy] has shown itself more resilient than many predicted, but that resilience is itself one of the reasons for higher inflation,” he said.
Corporate profiteering and wage increases were spurring on stubborn inflation, Mr Bailey said last month when the latest interest rate rise was announced.
“We can’t have companies seeking to rebuild profit margins which means prices continue to go up at their current rates,” Mr Bailey said.
“The current levels, I’ll be honest, are unsustainable.”
He has previously suggested that food producers – rather than supermarkets – may be overcharging.
Banks and supermarkets have continued to profit, with some seeing profits increase, throughout the cost of living crisis.
The chancellor also outlined ambitions for pension reform.
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