The inflation of the prices of food could rise as much as 5% in the Northern Hemisphere spring, exacerbating the growing cost-of-living crisis in the United Kingdomaccording to the president of the largest supermarket chain in the country.
John Alan, chairman of Tesco Plc since 2015, said the worst of rising food prices is yet to come, which could increase pressure on people already facing bulging energy bills and tax hikes from April. .
Tesco controls around 28% of the UK grocery market. Allan’s comments come a few weeks after Chief Executive Officer Ken Murphy warned that the supermarket chain faces rising costs but that the firm would work to mitigate them. The Bank of England forecast last week that inflation could rise to around 7% in the spring, a rate not seen for three decades, and would only decline enough to reach its target in two years.
“We are concerned, and I am sure a lot of people are concerned, that people may have to choose between heating their homes and feeding their families,” Tesco’s Allan told the BBC’s Sunday Morning programme. “And that is certainly not a situation that any of us should tolerate.”
Although food price inflation at Tesco was just 1% last quarter, the supermarket chain and its many suppliers are being hit by higher energy bills, which could act as a trigger for inflation. according to Allen. In addition, gasoline prices are unlikely to drop very quickly, he noted.
“I predicted last fall that food prices could rise 5% by spring,” Allan said. “I honestly think it’s not going to be more than that, it could even be a little less.”
Unless workers get a big pay raise, widespread food, clothing and gasoline price hikes will further tighten pockets. Last week, the Bank of England raised its key interest rate for the second meeting in a row as it tries to prevent a catastrophic contraction from having a huge impact on households and the economy.
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