The Tesco chairman has issued a stark warning about the impact of rising interest rates on the cost of living crisis. John Allan said that the rising cost of food and power will be joined by soaring mortgage costs.
His comments were made after the Governor of the Bank of England Andrew Bailey suggested interest rates may have to be raised higher than initially expected to tackle inflation. The bank raises interest rates to foster better conditions for savers, but an effect of that rise can be escalating mortgage costs.
Mr Allan told Laura Kuenssberg on her BBC Sunday morning programme: "The reality is that the movement in interest rates is now going to lead to much higher mortgage [repayments] for millions of people. Lots of people I think are [already] struggling with the existing elements of the cost of living crisis in food and so on."
Talking about the retailer's role in the lives of normal people, he added: "We have a moral responsibility to look after people, who in the real world are being impacted by this."
In the week that Jeremy Hunt was made chancellor, the chief of the UK's largest private sector employer said he was encouraged by Mr Hunt's remarks so far. But he also called for political stability the value of the pound fell in the wake of the mini-budget.
He also said Tory politicians must "look after those people suffering" and work on economic growth. He added: "At the moment there’s only one team on the field. I don’t think we’ve seen a growth plan from the Tories.
"We’ve seen the beginnings of a quite plausible growth plan from Labour. Many of their ideas are actionable and attractive."
The next interest rate rise decision is on November 3, following the Halloween Budget to announce tax and spending plans.
- Sunday with Laura Kuenssberg returns next Sunday on BBC One at 9am. It's available on iPlayer.
