Bank of England acted too slowly on inflation, says Asda chairman

The Bank of England and ministers were too slow to react to the impending wave of inflation that has triggered a cost of living crisis, one of Britain’s most experienced retail chiefs has said.

Lord Rose, the Asda chairman, also said politicians should intervene over high food prices, warning that they could remain elevated for “quite some time”.

He said: “I think the Government and the Bank of England have been slow to recognise inflation coming.

“We saw the signs last year that inflation was coming. I think the actions that have been taken to curb it have been a bit slow in coming.”

Lord Rose, who previously headed up Marks & Spencer and chaired Ocado, also backed a return to workplaces, saying “people are more productive in the office”.

Food prices increased 5.9pc in the year to March according to the Office for National Statistics, as producers grapple with the soaring costs of fertiliser, fuel and feed for animals.

The conflict in Ukraine has sent energy prices higher and cut off a key source of agricultural staples including wheat and sunflower oil. Global food prices hit a record high in the wake of the Russian invasion in late February.

“They are going to go higher and they’re going to stay high for some time, I fear,” said Lord Rose, who also pointed to disruption caused by lockdowns in China.

The retail grandee warned the UK is now in danger of a wage-price spiral in which salary increases fuel further inflation, or of sinking into a stagflationary environment of rising costs and weak growth.

“They are both evil, and the Government has got a very difficult and tricky road to navigate,” he said, warning that it took a decade to get past the last surge of inflation in the UK.

Lord Rose, the former chairman of the Remain campaign, added: “The Government can’t sort out all the problems but the Government could do a few things. It could talk to industry.

“It could talk to the food retailers to make sure that we are cutting out every extra cost.”

He said Asda will “do what we can” to reduce cost increases for customers.

The Bank's Monetary Policy Committee is expected to vote this week to increase interest rates to 1pc, the highest since the financial crisis, in an effort to rein in high cost increases by slowing demand.

Also speaking on Sunday, Business Secretary Kwasi Kwarteng said there was “obviously an issue” with the rising cost of living, and that it was unclear how long inflation would remain high. Liberal Democrat leader Sir Ed Davey said inflation would remain high for at least a year or two.

On working from home, Lord Rose told the BBC: “I personally am an unreconstructed ‘get back to work’ man”, but said employers needed to be more “flexible”.

“I think people are more productive in the office,” he said. “I am certainly encouraging those people I work with to come back to the office.

“But we have to be flexible, we have to understand that some people have particular needs and worries and concerns and health issues, so that’s what we are doing [at Asda].”