British supermarkets are set to cap prices on everyday essentials like eggs, bread and milk under bold new government proposals - but ministers say this would not be a return to the 1970s

The Treasury is putting pressure on supermarkets to cap prices on staple groceries as a quid pro quo for axing taxes and red tape

The price of eggs, bread and milk would be voluntarily capped under the proposals in return for easing packaging policies and delaying rule changes around healthy food.

It comes as new figures show CPI fell to 2.8 per cent