Tesco boss says ‘the worst is yet to come’ and 5% rise in food prices will ‘squeeze’ the poorest

Supermarket giant chairman John Allan has said some people will “of course” have less to spend on luxuries as energy bills rise by £693 and a rise in National Insurance comes in vigor.

The ‘worse is yet to come’ for hard-core Britons, the boss of Tesco warned today as he warned a 5% rise in the weekly shop will ‘squeeze’ Britain’s poorest.

Chairman John Allan said food prices at the supermarket giant only rose 1% last quarter, but are expected to rise 5% by spring.

He admitted some people will ‘of course’ have less to spend on luxuries, as it comes with a hike in National Insurance and a £693 rise in the average family’s annual energy bill , at £1,971.

And he said the increase – matched by just £350 in government aid, of which £200 has to be repaid – “will squeeze the toughest ones even tighter”.

It came as Tory Business Secretary Kwasi Kwarteng appeared to admit young Britons had to repay the £200 loan from government energy bills – never actually receiving it.

All UK households paying an electricity bill will get a £200 reduction from October this year. But the money must then be repaid at £40 a year for five years from 2023/24 to 2027/28.

Because it has to be paid back on all energy bills, campaigners fear that 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 will give £200 and then the money will be recovered over five years.

“I can’t tell you what the price will be in five years, but it will be recovered on that.”

Mr Kwarteng added that the National Insurance hike in April “has been settled” despite furious calls from the Tories to scrap it.

Tesco boss Mr Allan has insisted the supermarket chain cut prices where it can with the cheapest tin of beans now 22p, down from 25p five years ago.

But he was challenged by the company’s rising profit which was forecast at more than £2.5billion for the year in October.

For poor families, he told the BBC Sunday Morning: “In some ways the worst is yet to come – because although food price inflation at Tesco last quarter was just 1%, we are affected by rising energy prices. Our suppliers are impacted by rising energy prices.

“It is likely that the inflation figure will increase. We do everything we can to compensate for it. »

He added: “I predicted last fall that food prices by spring could rise by around 5%.

“I sincerely believe that it is not going to be more than that, it could even be a little less.

“But that’s the kind of number we’re talking about. Of course, 5% – if you’re spending, as some of the less well-off families do, 15% of household income – that’s important.

“It bothers us and I’m sure a lot of people are struggling to choose between heating their homes and feeding their families.

“This is clearly not a situation that any of us should tolerate.”