The “worst is still to come” for hard-up Brits, the boss of Tesco warned today as he warned of a 5% hike in the weekly shop that will “squeeze” the poorest in Britain.
Chairman John Allan said food prices in the supermarket giant’s rose only 1% last quarter but are likely to be rising by 5% by the Spring.
He admitted some people will “of course” have less to spend on luxuries, as it comes at the same time as a National Insurance hike and a £693 rise in the average family’s annual energy bill, to £1,971.
And he said the rise - offset by only £350 of government help, of which £200 has to be paid back - “is going to squeeze the hardest-up still harder”.
It came as Tory Business Secretary Kwasi Kwarteng appeared to admit young Brits face paying back the government’s £200 energy bills loan - without ever having actually received it.
All British households who pay an electricity bill will get £200 off from October this year. But the money then has to be paid back at £40 a year for five years from 2023/24 to 2027/28.
Because it is set to be repaid out of all energy bills, campaigners fear people in their late teens, or who have a “bills included” landlord, will end up paying £40 a year without seeing the £200.
Mr Kwarteng told Sky News: “The principle has been established that the Treasury is going to give £200 and then the money will be recouped over five years.
“I can’t tell you what the price will be in five years’ time but it will be recouped off that.”
Mr Kwarteng added the National Insurance rise in April “has been settled” despite furious Tory calls to axe it.
Tesco boss Mr Allan insisted the supermarket chain brings down prices where it can with the cheapest tin of beans now 22p, down from 25p five years ago.
But he was confronted with the firm’s rising profits which were forecast at more than £2.5bn for the year in October.
For poor families, he told BBC ’s Sunday Morning: “In some ways the worst is still to come - because although food price inflation in Tesco last quarter was only 1%, we are impacted by rising energy prices. Our suppliers are impacted by rising energy prices.
“The likelihood is that inflation figure will rise. We’re doing all we can to offset it.”
He added: “I predicted last Autumn that food prices by the Spring might be rising at about 5%.
“I sincerely believe it’s not going to be any more than that, it might even be slightly less.
“But that’s the sort of number we’re talking about. Of course, 5% - if you’re spending, as some of the least-well-off families are spending, 15% of household income - is significant.
“It troubles us and I’m sure troubles many people that people may have to struggle to choose between heating their homes and feeding their families.
“That’s clearly not a situation any of us should tolerate.”
