Tesco chair John Allan has warned of the financial struggles likely to be faced by the public amid rising interest rates and ongoing concern for the UK economy.
Speaking on the BBC’s Laura Kuenssberg programme on Sunday, Allan spoke of the effect that rising interest rates would have on millions of people across the UK, saying that Tesco had “a moral responsibility to look after people who, in the real world, are being impacted by this”.
The conversation came in the wake of a Bank of England statement that interest rates may rise further than predicted.
“The reality is that the movement in interest rates is now going to lead to much higher mortgage [repayments] for millions of people,” said Allan.
“Lots of people I think are [already] struggling with the existing elements of the cost-of-living crisis in food and so on.”
As the UK’s largest supermarket and biggest private sector employer, Allan also highlighted that Tesco took its “moral responsibility” seriously.
He pointed to the firm’s recent fall in profits across its retail division as well as the news that shop workers have received two pay rises this year as evidence that the business was already absorbing costs in a bid to avoid passing rising prices onto struggling customers.
Inflation is currently increasing at almost its fastest rate in 40 years, driven largely by the rising cost of food and fuel.
Rising costs and recent market turmoil are top issues facing the new chancellor Jeremy Hunt, who replaced Kwasi Kwarteng late last week, said his focus was on growth “underpinned by stability”, warning of tax rises and savings in public spending.
Allan told the BBC that that he felt “encouraged” by the new chancellor’s recent remarks, urging the government to focus on stability after the market turmoil of recent weeks and calling for a “concrete plan” outlining how they will grow the economy.
He added that Labour had the start of a growth plan, with “many attractive ideas”.
The Bank of England currently expects that the increase in the cost of living will peak at 11% in October and then stay above 10% for a few months before starting to come down.
The next interest rate rise decision will be announced on 3 November, after the government has laid out its new economic plan.
