A Tory peer has admitted households face a “very, very unpleasant” time ahead as he slammed Kwasi Kwarteng’s mini-Budget shambles.
Lord Rose, former boss of Marks & Spencer and now chairman of Asda, criticised the Chancellor for ditching the 45p rate of tax for the rich.
And he warned some shop prices would rise “immediately” because of the plunge in the pound.
It came on another dramatic day that saw the Bank of England announce emergency plans to buy UK Government debt after warning of a “material risk to UK financial security” if the current turmoil continued.
The move is specifically designed to bring down interest rates - yields - on Government bonds of 20 years or more.
The intervention follows concern that pension funds facing urgent demands for cash from investment managers could be forced to sell bonds they hold in a hurry.
The Bank warned this week that borrowers faced another “significant” interest rate to try to prop-up the plunging pound.
Lord Rose, interviewed on Radio 4’s Today programme, predicted there will be another “massive” interest rate rise in the next three to four weeks, I can’t see how it won’t happen.
He warned any such hike will be “very, very unpleasant” for many people.
“If you’re a consumer you’ll be saying, ‘blimey, this is going to be quite a difficult time’, and it will be,” he added.
Lord Rose said the mini-Budget has dented business confidence.
“Business hates uncertainty and what we have now is rather more uncertainty,” he said.
“Nobody likes to operate without full visibility of the runway.”
Wth the pound “dropping like a stone”, the retail veteran said the impact would be felt by shoppers.
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.”
Lord Rose also had a dig at the Chancellor’s announced cut in the rate of income tax for big earners. “From my own personal point of view, I wouldn’t work any less hard if my tax was 45% rather than 40%,” he said.
“I personally do not think it was necessary to reduce tax from 45% to 40% at this particular time.
