Inflation is hitting Britain harder than EU, says Poundland owner

BRITISH shoppers are suffering from the cost of living crisis more than their European neighbours, according to the boss of the company that owns Poundland.

Pepco said customers in the UK were cutting back on core purchases as widespread inflation knocks disposable incomes. The variety retailer operates under its own name and the Dealz brand in several European countries including Germany, Italy, Poland, Czechia and Spain.

It said high wage growth in central and eastern Europe was offsetting the rising cost of living, while western European households – particularly in the UK – are feeling the pinch.

The group said: “In western European markets the acute spike in inflation in a stagnant wage growth environment has quickly resulted in absolute lower spending by consumers.

“Specifically in the UK, the cost of living crisis has impacted customers’ disposable income as they scale back even on essential purchases in the short term.”

Pepco said it was trying to cut costs in order to shield customers from price increases.

The company added that the spillover of refugees from the Ukraine conflict had boosted its eastern European operations.

“The invasion of Ukraine, a country which borders three of our largest operating territories, continues to create volatility, albeit with some trading upside driven by the influx of people to core Pepco markets,” the company said.

Inflation in the UK is expected to average 8.8pc during 2022 and reach double figures later in the year according to a report published on Wednesday by the Organisation for Economic Co-operation and Development (OECD), a Paris-based think tank. Its chief economist Laurence Boone said that higher interest rates, reduced trade, high taxes and soaring energy costs had all contributed to the sharp rise in inflation.

Prices rose 9pc in the year to April in Britain, the fastest pace in 40 years and the highest out of any country in the Group of Seven advanced economies.