LONDON: Food price rises in the wake of sterling’s post-Brexit vote slump will be softened by intense competition in the industry, which is currently still driving them lower, grocery executives said on Tuesday.

Most economists believe food prices are set to rise as the pound has fallen 18 percent against the dollar and 14 percent against the euro since Britain voted to leave the European Union in June, making importing goods more expensive.

Nearly half of the food Britain consumes is imported.

While official data on Tuesday showed overall inflation recorded its biggest jump in two years in September, industry data from Kantar Worldpanel showed grocery deflation of 0.8 percent for the 12 weeks to Oct. 9 — a contraction from 1.1 percent in Kantar’s September report.

Though a slower rate than in recent months the falling prices reflect a price war by discounters Aldi and Lidl on the market and the competitive response of the big four players - Tesco, Sainsbury’s, Asda and Morrisons . It also reflects deflation in some major categories such as bacon, crisps and detergents. Joanne Denney-Finch, CEO of industry body IGD, said food retailers could not hold out forever if import prices do increase significantly.

“But they are competitive and that will mean quite a lot of price increases will be muted,” she told the IGD’s annual conference. Matt Davies, UK CEO of Tesco, told the conference the market leader would do everything to ensure food inflation “is kept to a minimum”, noting that its prices had fallen 6 percent in the last two years. “Everybody should be very clear how damaging inflation is to the economy, to retail businesses, to manufacturing businesses and how lethal it can be to millions of people who are struggling to live from week to week,” he said.—Reuters