UK Facing Another Cost Of Living Crisis In 2023, Says Boss Of Retailer Next

Next's chief executive has warned that the UK may be heading for a second cost of living crisis next year as the slump in the value of the pound drives further price rises.

- Sarah Butler

Yesterday the fashion and homewares retailer cut sales and profit expectations for the year after a disappointing August, and because of fears that additional inflation would squeeze shoppers' spare cash.

Simon Wolfson, the chief executive of Next and a Tory peer, said the run on the pound that followed Kwasi Kwarteng's mini-budget last week would hurt businesses relying on imports.

"The devaluation of the pound looks set to prolong inflation, even once factory gate prices ease," he said. "It looks like we may be set to have two cost of living crises: this year, a supply-side-led squeeze; next year a currency-led price hike as devaluation takes effect."

Lord Wolfson said businesses were only just recovering from this year's supply chain constraints, with the factory gate price of goods stabilizing and in some cases coming down, while freight costs were also beginning to ease.

But he said inflation could be worse in the second half of next year than now because many clothing and homeware factories priced their goods in dollars, and sterling's value against the US currency had crashed to historic lows.