Supermarkets could be encouraged to introduce voluntary price caps on food staples amid the cost of living crisis in the UK, reports suggest.

Many households are facing financial difficulty trying to keep the cost of everyday life down as prices of necessary food items continue to rise.

Downing Street is believed to be drawing up plans for a scheme aiming to get retailers charging the lowest possible amount for some basic products like bread and milk, the Sunday Telegraph first reported.

The plans are at “drawing board stage” and would not involve government-imposed price controls, a No 10 source has said.

A Treasury source told the Sunday Telegraph: “Food inflation is much more resilient and difficult to get rid of than we anticipated.”

Supermarkets are expected to be allowed to select which items they would cap and only take part in the initiative, modelled on similar agreement in France, on a voluntary basis, the paper reported.

It comes after Chancellor Jeremy Hunt backed interest rate hikes, even if they risk of plunging the UK into recession, in order to combat soaring inflation.

Though down from 10.1%, the Consumer Prices Index of inflation remains stubbornly high at 8.7%, while experts have warned that alarmingly expensive food is set to overtake energy bills as the “epicentre” of the cost of living crisis.

Food prices are expected to keep rising, having already increased by 19.1% in the year to March, placing additional pressure on families.

Border Counties Advertizer: Items such as bread and milk would be included in the price cap schemeItems such as bread and milk would be included in the price cap scheme (Image: Yui Mok/PA)

Aldi named UK's cheapest supermarket in April

Aldi was named the UK’s cheapest supermarket in April according to new analysis by Which?

Research by the consumer champion found shoppers could save £17 on a basket of items from Aldi compared to the most expensive store.

The monthly analysis involves comparing the prices of a shop that this time consisted of 39 popular groceries at eight of the UK’s biggest supermarkets.

A basket of goods at Aldi cost £69.99 on average across the month.

Lidl placed behind Aldi with a difference of 65p (£70.64), widening the gap from March which was just a 25p difference.

The same shop at Waitrose was £87.33 on average, a difference of £17.34 – or 24.7% more.