The boss of Iceland has warned customers that rising costs will have to be passed on in higher prices and says things are going to get worse. Richard Walker, Iceland's managing director, was speaking after it was revealed that the Consumer Price Index measure of inflation had hit 10.1% - the highest rate in 40 years.
The figure from the Office for National Statistics measures how quickly everything is getting more expensive. Speaking on Good Morning Britain, Mr Walker said: "The last thing we want to do is pass on costs but it is a reality of the inflation we are seeing and the reality is that 10.1% figure is a median figure - it includes high value items like Champagne and legs of lamb.
"Actually, if you are on the breadline and struggling in the first place, staples like milk, bread - they are going up a lot more than that. We have got to be honest - I think it will get a lot worse."
He said four litres of milk has already gone from £1 to £1.50 at Iceland which was "good value and in line with other retailers". It is the biggest jump in the cost of living since February 1982, when CPI reached 10.4%, according to ONS estimates.
It is also a massive jump from the 9.4% inflation in June, reports BirminghamLive.
Mr Walker discussed the supermarket chain’s new interest-free “microloans” scheme to help shoppers with rising inflation.
In an interview with Sky News, he said: “Yeah, so it’s something we have been trialling for the last 18 months. These are affordable microloans that are very time-limited and small amounts – anything from £25 up to £75.
“You repay a set amount of £10 a week and there’s no interest; we will pay the interest on the borrower’s behalf.
“We’ve partnered with a charity-owned not-for-profit called Fair For You, an ethical lending provider, and they are assessing people who are struggling to make ends meet – as you said, there’s plenty of those around at the moment.
“And, if they’re successful in their application, they’ll get a pre-loaded Mastercard that they can spend in an Iceland shop.”
ONS chief economist Grant Fitzner said: “A wide range of price rises drove inflation up again this month.
“Food prices rose notably, particularly bakery products, dairy, meat and vegetables, which was also reflected in higher takeaway prices.
“Price rises in other staple items, such as pet food, toilet rolls, toothbrushes and deodorants, also pushed up inflation in July.
“Driven by higher demand, the price for package holidays rose, after falling at the same time last year, while air fares also increased.
“The cost of both raw materials and goods leaving factories continued to rise, driven by the price of metals and food respectively.”
The Retail Price Index, a measure used to determine how much rail tickets will go up in January, hit 12.3% today.
And energy prices are expected to rise even further. On Wednesday energy consultancy Auxilione said that at today’s prices the cap might rise to £4,722 in January before hitting £5,601 in April.
Food and non-alcoholic beverages prices increased by 12.7%, the ONS said, a rise from 9.8% the month before and the highest since August 2008.
The statisticians track the prices of 11 food and non-alcoholic beverages categories, and in July all of them rose.
The biggest impacts on inflation were from bread and cereals, and milk, cheese and eggs.
Shop-bought milk, cheddar and yoghurt prices “increased notably”, the ONS said.
There were also smaller impacts from rising cooked ham and bacon prices, vegetables, sugar and jam, among other things.
Chancellor Nadhim Zahawi said: “I understand that times are tough, and people are worried about increases in prices that countries around the world are facing.
“Although there are no easy solutions, we are helping where we can through a £37 billion support package, with further payments for those on the lowest incomes, pensioners and the disabled, and £400 off energy bills for everyone in the coming months.
“Getting inflation under control is my top priority, and we are taking action through strong, independent monetary policy, responsible tax and spending decisions, and reforms to boost productivity and growth.”
Rocio Concha, director of policy and advocacy at Which?, said: “These figures underline the scale of the cost-of-living crisis and make clear that millions of people face a dire financial situation in the months ahead.
“With bills set to rise further, it’s clear that the current level of cost-of-living government help will not be sufficient.
“Ministers must now move quickly to increase the amount of support for those who are struggling, and businesses in essential sectors, such as supermarkets, energy and telecoms, must also do everything they can to make sure customers are getting a good deal and extra support if they need it.”
