Make your prices clearer, supermarkets told; ex-banking boss says Coutts-Farage row is a ‘grey area’– business live

Exceedingly good news? Mr Kipling owner says UK food inflation has peaked

Joanna Partridge

On that subject, the maker of Mr Kipling cakes, Oxo cubes and Bisto gravy granules has said it believes recent food cost inflation has peaked, and it is not planning any more price rises for its food products for the rest of the year.

The news came as owner Premier Foods reported a 21% increase in sales in the first quarter of the financial year, compared with a year earlier.

The grocery sector has been under pressure in recent months, with food producers facing a surge in cost of ingredients and retailers trying to keep prices low to attract customers.

Sales of branded products were nearly 18% higher in the 13 weeks to 1 July, while the London-listed company said it had further grown its market share during the past quarter.

High food inflation in the UK has not been driven by weak competition between supermarkets, an initial review into grocery pricing from the competition watchdog has found.

However, the Competition and Markets Authority also said rules on pricing should be tightened and that retailers must do their bit to help shoppers compare prices easily.

The CMA will now look at competition for 10 product areas including milk, bread and baby formula, or across the wider supply chain, to ensure supermarkets pass on savings to customers as cost inflation eases. So far, it has found:

• Evidence to date indicates high food price inflation has not been driven by weak retail competition, but competitive pressure is important as input prices fall

• Next phase of CMA probe will examine competition and prices across the supply chain for the product categories identified

• Rules on unit pricing should be tightened and retailers must comply to help shoppers compare prices easily

On the last point, the watchdog voiced some concerns – for example, different measurements are being used for similar types of products, making it hard for consumers to compare deals on a like-for-like basis. So for instance, tea bags being priced per 100 grams for some products and others being unit priced per each tea bag. Or sometimes it’s hard to read the pricing information because the text is too small or the shelf edge labels are hidden.

Over the past couple of months, the watchdog has assessed how retail competition is working in the UK grocery sector, particularly between supermarkets such as Asda, Morrisons, Sainsbury’s and Tesco as well as discounters, including Aldi and Lidl. It said:

Not everyone is able to benefit fully from strong competition, particularly those who cannot travel to large stores or shop online, and therefore may rely on higher-priced convenience stores.

Now that some input costs are starting to fall, there are some signs that grocery retailers are planning to start rebuilding their profit margins. The CMA will monitor this carefully in the months ahead, to ensure that people benefit from competitive prices as input costs fall.

Nigel Farage has praised the government following reports that ministers are considering passing new laws that would prevent banks shutting customers’ accounts because they disagree with their political views.

The former Ukip leader said MPs are “beginning to realise that this system is coming for them as well” after his bank accounts were closed by Coutts because his views “did not align with” its values.

Under plans to protect free speech, banks could lose their licences if they blacklist people with controversial views, The Times reported.

Speaking to the PA news agency, Farage said:

Well done, the government. This is one of the swiftest interventions I’ve seen by government for many, many years.

And hat’s because this problem of the way banks have been behaving has been building up for years and years and years. Every MP will know of constituents, small businessmen and women who’ve literally been shut down by their banks with no reason given whatsoever.

I also think that because of the politically exposed persons (PEPs) rule, I think they’re beginning to realise that this system is coming for them as well.

He claimed there is “a real sense of anger” among the public, after taxpayers bailed out banks during the 2008 financial crisis, that they “can now treat us with contempt”.

The closure of his accounts sparked outrage among senior Tory MPs, who have piled pressure on Coutts and its owner NatWest.

Rishi Sunak said “this is wrong” and that “no one should be barred from using basic services for their political views”.

The Treasury is expected to announce plans as soon as next week to extend the notice time given to customers to close their accounts from one month to three months, The Times said. Banks will also have to explain why they are closing an account, and customers will be able to appeal against the decision.

Farage said he was “really angry” that several members of his family have been refused bank accounts or had them closed.

Angela Knight, former head of the British Bankers’ Association, said the politically exposed persons (PEPs) rule is a “grey area” that is “worthy of discussion” as she criticised Coutts’ move.

Veteran journalist Andrew Neil said Coutts “acted like a kind of political politburo rather than a bank”.

He added:

If banks want to act as political parties and have political criteria, they should publish what their political criteria is before you can have their bank account. They should also make themselves accountable to the public.

Mortgage rates in the UK have fallen back after yesterday’s sharp slowdown in inflation to 7.9%, which raised hopes that the Bank of England may not need to raise interest rates as high as feared.

The average two-year fixed residential mortgage rate has declined to 6.79% today from 6.81% yesterday, while the average five-year fix is now at 6.31%, down from 6.33, according to data provider Moneyfacts.

At the same time, some savings rates have increased. The average one-year fixed savings rate rose to 5.14% from 5.13% while the average rate on an easy access savings account is unchanged at 2.62%.

Inflation slowed more than expected to 7.9% in June from 8.7% in May because of a sharp drop in petrol prices. While this is still far above the Bank’s 2% target, financial markets are no longer betting that interest rates will rise above 6%. However, UK inflation remains the highest among the G7 group of advanced economies.

Angela Knight, the former chief executive of the British Bankers’ Association, said she found it “uncomfortable” to see a bank close someone’s account because of their political views, referring to Coutts bank’s decision to shut Nigel Farage’s account. She said it is a “grey area” that needs to be addressed.

Coutts, an exclusive private lender that caters for royals and the super-rich, terminated its relationship with Farage earlier this year. Yesterday, the Brexit campaigner and former UK Independence party leader released internal documents obtained from the bank, which stated it was concerned about his “xenophobic, chauvinistic and racist views” and believed maintaining his accounts posed a risk to the bank’s reputation.

Speaking on BBC radio 4’s Today programme, Knight said:

We have long operated in this country, under a regime which I will define as: ‘I disapprove of what you say, but I will defend to the death your right to say it,’ and I do find it somewhat uncomfortable to see a situation arise where because of somebody’s legitimate views, even though you may not agree with them, somehow has resulted in a service being withdrawn and they’re not being told about it. I mean, suppose a bank really does disagree with somebody’s behaviour, they should at least tell them. In this instance, what seems to have happened is that nothing was really fed in any way to the individual concerned.

We have freedom of speech in this country. So it is a bit of a grey area, and I do think it it is worthy of discussion and I think it’s something that has been coming for some time.

Her comments come after the City regulator said it had contacted the owner of Coutts bank amid a growing row over its decision to close Farage’s accounts, but told MPs that while lenders cannot discriminate against customers, it is ultimately up to firms to decide who to do business with.

The journalist and broadcaster Andrew Neil, chairman of The Spectator and presenter of The Andrew Neil Show on Channel 4, has described Coutts’ decision as a “new form of McCarthyism”. He said on BBC radio:

The bank acted like a kind of political Politburo rather than a bank, and they’ve got themselves into this terrible mess now, and the law will be changed as a result. As a result, the banks will not be able to discriminate against customers on political grounds.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Wheat prices have jumped on global markets after Russia this week pulled out of an agreement that guaranteed safe passage for ships carrying grain through the Black Sea.

Russia has carried out heavy air strikes on Ukraine’s grain stores and port infrastructure in the Black Sea port of Odesa.

Russia’s Ministry of Defence warned that all ships in the Black Sea heading to Ukrainian ports would be considered potential carriers of military cargo from today.

President Vladmir Putin said he would return to the grain deal if his demands are met, which include improving exports of Russia’s grain and fertiliser, and reconnecting Russia’s agricultural bank to a global payments system.

The Black Sea deal was brokered by the UN and Turkey in July last year amid a global food crisis exacerbated by Russia’s invasion of Ukraine in February last year, which sent wheat prices sharply higher. Both countries are among the world’s top grain exporters.

Wheat prices rose more than 8% yesterday, the biggest daily rise since 2012, while corn prices climbed more than 5%. Wheat futures traded in Chicago rose a further 1% today.

In Britain, a fresh wave of rail strikes has begun over job security and pay, with up to 20,000 RMT workers at 14 train companies joining picket lines all over the country today. They will strike for 24 hours today and again on Saturday, just as the summer holidays start and many families head off on their breaks.

There will also be strikes on the London Underground next week, in 10 days of transport disruption.

The Agenda

• 1.30pm BST: US Initial jobless claims for the week of 15 July

• 3pm BST: Eurozone Consumer confidence flash for July

• 3pm BST: Conference Board leading index for June; home sales