Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to page 6 of the Working Paper by the International Monetary Fund entitled Euro Area Inflation after the Pandemic and Energy Shock: Import Prices, Profits and Wages, published June 2023, what assessment he has made of the implications for his policies of the analysis by the Fund of the potential effect of the level of corporate profits on real wages; and if he will take steps to limit the potential inflationary impact of corporate profits on wage growth.

UK inflation has been affected by global factors, including Russia’s invasion of Ukraine affecting energy and food prices. The UK is not alone in facing these challenges, advanced economies across the world are feeling the impact of inflation.

That is why halving inflation is one of the Prime Minister’s top priorities. Evidence that corporate profits play a role is inconclusive. The independent Competition and Markets Authority have authority to intervene if they find evidence of anti-competitive conduct or competition law is breached.