Tesco shares fall as it warns inflation will squeeze profits

Supermaket chain Tesco is battling to keep prices low.

Tesco warned its profit will be squeezed this year as the supermarket chain battles to keep prices low for consumers who are facing a cost of living crisis. The shares fell sharply, by 4%. 

The grocer, along with UK rivals, is grappling with inflation that soared to a 30-year high in Britain last month, pinching household budgets even as input costs swell. Chief executive Ken Murphy pledged to keep costs in check to ensure shoppers don’t defect to discounters like Aldi and Lidl.