Asda chair Lord Stuart Rose has said some supermarket prices are likely to rise “immediately” as a result of the pound falling to a record low.
Last week the pound saw a 37-year low against the US dollar, following the announcement of Chancellor Kwasi Kwarteng’s mini-budget.
Speaking on BBC Radio 4’s Today programme, Lord Rose warned that a significant hike in interest rates over the next year could be “very, very unpleasant” for UK households. He added that the Big 4 grocer‘s income tracker shows “20% of households in the UK are running at income deficit”.
“If you’re a consumer you’ll be saying ‘blimey this is going to be quite a difficult time’ – and it will be.”
He explained: “A lot of our food at this time of the year, most of textiles, most of our electronics and household goods are imported, so the cost of those will go up immediately.”
“We’ve seen some interventions this week”, Lord Rose added, although he also explained this “will not really make a net income benefit to many people”, describing the pound as “dropping like a stone.”
Last week, the government announced that businesses across the UK will see a six-month price cut on their expected energy bills through a winter relief scheme.
Lord Rose explained that while this will benefit businesses in mitigating inflation, “on the other side you’ll get inflationary pressure”.
“Business hates uncertainty and what we have now is rather more uncertainty,” he said, adding that business confidence has been dented by the mini-budget because “nobody likes to operate without full visibility of the runway”.
“The government need to tell us what it’s going to do to put inflation under control.”
Lord Rose also commented on the chancellor’s cut in income tax for high earners, saying he “did not think it was necessary” to reduce tax from 45% to 40% at the moment.
