Supply chain crisis derailing recovery, warns Andrew Bailey –

The fall has taken sterling to its lowest level since December as investors seek safe haven assets amid rising concern about soaring natural gas prices and ongoing petrol shortages. 

Jordan Rochester, an analyst at Nomura, said the pound was “losing its inflation credibility” as scenes of queues at petrol stations “suggest the Conservative Government is losing its reputation for competence”.

Valentin Marinov at Credit Agricole said: “Investors fret about the looming stagflation risks ahead that could scupper the UK economic recovery and force the [Bank of England’s Monetary Policy Committee] to reconsider its plans for policy normalisation.”

As the army was drafted in to help clear continued problems at petrol stations, Next warned that a lack of lorry drivers and warehouse workers could derail Christmas shopping deliveries and told customers to prepare for higher prices. 

The retailer, which is considered a bellwether for the British high street, said an increase in shipping costs had pushed up prices by about 2pc for the six months to July 31. 

It added that this is likely to continue into next year, with shop prices predicted to rise by about 2.5pc in the first half of 2022. Clothing prices are expected to increase by 1pc and homeware products by 6pc, with goods such as sofas and beds more expensive to import.

Despite reporting a surge in profits and sales, Next’s chief executive warned that “things may not be as good as they appear today”, with higher costs and labour shortages likely to hold back demand in the months ahead.

Lord Wolfson, a prominent Brexiteer and Tory peer, demanded that the Government take a “more decisive” approach to the acute shortage of lorry drivers, saying that the current situation “was foreseen, and widely predicted for many months”.

The company said deliveries are likely to suffer in the run-up to Christmas unless immigration rules are relaxed to allow it to hire temporary warehouse staff and drivers from abroad. However, it said that availability in stores will not be affected. 

Lord Wolfson said: “[For] many of us who voted for Brexit, it had nothing to do with immigration. Ultimately, Britain gets to determine its own immigration policy, [Brexit] doesn’t decide what that immigration policy should be … it has to be a system that responds to skills shortages and particularly things like seasonal peaks.”

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