Some supermarket prices are likely to rise “immediately” as a result of the pound falling to a record low, Asda chair Lord Stuart Rose has said.
Following the announcement of Chancellor Kwasi Kwarteng’s mini-budget announced last week, the pound saw a 37-year low against the US dollar. The drop in pound value is expected to see implications in the form of higher prices.
“A lot of our food at this time of the year, most textiles, most of our electronics and household goods are imported, so the cost of those will go up immediately,” Lord Rose said.
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.
Pointing out that Asda’s income tracker shows “20 percent of households” running at income deficit” and spending £60 more than they are earning every month, Lord Rose said that most prices will see a sharp rise soon.
“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.”
“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 needs 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 percent to 40 percent at the moment.
Lord Rose has also declared that household budget deficit means people are having to “rein in spending and move away from premium brands.”