Simon Wolfson, the chief executive of fashion retailer Next, has claimed that inflationary pressures can only be tackled by increasing the supply of goods and workers as tax cuts will not solve the challenges facing the British economy, according to The Telegraph.
The Telegraph reported that Wolfson also predicted that while Britain was likely heading for a recession, the result was likely to be “a slight decline” in earnings rather than mass job losses, due to high levels of employment.
The chief executive’s comments come as Sajid Javid, the health secretary, defended the tax cuts proposed by Conservative leadership frontrunner, Liz Truss, and insisted they would not drive up inflation.
Next said it is not currently seeing any “worrying” signs that customers are struggling with debts, as Wolfson spoke to The Telegraph just as the company reportedly raised its annual profit forecast after full-price sales rose 5pc in the three months to the end of July when compared to a year ago.
In a recent trading update, the company also said its Q2 sales exceeded expectations by £50m, prompting Next to raise the full-year profit guidance by £10m to £860m.
Wolfson told The Telegraph: “There is a supply-side problem, a shortage of goods and services and skills. Just printing money isn’t going to actually increase the amount of goods in the country.
“So when people talk about help from the government, I think what is very important is that those people who are the very worst off in society, there’s an awful lot the Government can do to make sure that those people are properly provided for, so they can heat their homes and feed themselves.”
He added: “But there’s nothing that the Government can do for everybody because, at the end of the day, the problem is that there’s less fuel, less goods, less services available, and that is what’s causing prices to rise.
“Unless you tackle that fundamental problem, printing money isn’t going to change that. It’s going to be some supply-side measures and changes in supply… rather than demand-side measures such as interest rates and fiscal measures.”
In this report, he also urged the government to boost house building by unblocking the planning system, arguing that the housing market was “the biggest area of chronic inflation, and we have a planning system that just doesn’t deliver”.