Former Sainsbury’s chief executive Justin King has warned consumers “the worst is yet to come” on food prices amidst warnings that double-digit inflation could last for more than a year.
Speaking to LBC Radio, King said the UK was likely to see “significant food price rises” over the summer and accused the Bank of England of mismanaging its response to the crisis earlier in the year.
“It was my view, expressed publicly six months ago when the Bank of England felt that it would be around 5% and relatively short-lived, that it would be closer to 10% and long-lived, and I think we’re seeing that – even I was under-calling it.
“We’re definitely going to see double-digit food inflation, and I think very likely it will persist for a longer period of time than just a year or so.”
King also said he believed the weakness of the pound on the international currency markets may be another factor in rampant inflation, as the UK buys much of its food in euros and US dollars.
“The impacts of energy price rises, and the very significant impact on availability of core commodities such as oil and wheat, and so on… they haven’t found their way through the food price system yet,” he said.
“They are working their way through to prices and will be very significant.”
King’s warning comes after a report was published on Thursday (June 16) by IGD which warned grocery inflation could top out at 15% over the summer.
IGD said that factors including uncontrolled increases in labour costs, trade disruptions caused by Brexit and the weakening of the sterling against other currencies could be behind the rising inflation rate.
“We are already seeing households skipping meals, a clear indicator of food stress,” said IGD chief economist James Walton.
Last Friday, Tesco boss Ken Murphy said the grocery giant was beginning to see basket sizes shrink and customers trading down in response to the gathering cost of living storm.
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