Thursday, October 19, 2017

Tesco’s chairman says return to 2% inflation “likely”

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Tesco chairman John Allan has spoken out about the effect of Brexit, warning that food price hikes are “likely”.

Speaking to BBC Radio Four‘s Today program, Allan said if the value of the sterling did not recover, inflation would return rise by two per cent and food prices would be a part of that.

Following Tesco‘s public spat with Unilever over price rises in their products – especially Marmite – as a result of the weak pound, Allan also made efforts to assure customers the grocer would do everything in its power to protect them from further rises in prices.

“Everyone who wants to increase prices will get scrutiny. We are trying to defend our customers from unjustified price increases,” he said.

“But, that it is likely there will be some price increases going forward – I think is very likely.

READ MORE: Inflation rises 1% as consumers start to feel the effects of the weak pound

“Remember at the moment we have got virtually nil inflation. Inflation I think could nudge up to two per cent or three per cent, food prices would be a part of that.”

The Tesco chairman then went on to warn about the effects of rejecting unskilled workers from the EU following Brexit. 

“We have about a million, for example, EU citizens living in London, and many hundreds of thousands elsewhere in the country,” Allan said.

“Industries like the agricultural industry, picking and packing fruit and veg, and meat, and so on, are heavily dependent on migrant workers – not just seasonal migrant workers, but people who are here 52 weeks a year.

“And I know our fresh food suppliers are very concerned that is properly taken into account. We don’t just need brain surgeons and architects, I think we need many people who do much more ordinary, but nonetheless extremely important, jobs. “

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