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Unilever expects high inflation next year amid further price increases

Unilever has warned it expects high inflation to “persist” into 2023 as the consumer goods giant benefited from raising its prices.

The Persil and Marmite maker raised its sales guidance for the year after it pushed prices higher in order to offset rocketing costs.

The London-listed firm reported that sales volumes were 1.6% lower in the three months to September amid continued pressure on customer finances.

It cautioned that it expects “more negative underlying volume growth” in the final quarter of 2022.

A tub of Ben & Jerry's ice cream
Unilever owns brands including Ben & Jerry’s and Hellmann’s (Ben & Jerry’s/PA)

Unilever told investors that turnover increased by 17.8% to 15.8 billion euros (£13.7 billion) over the quarter as it was buoyed by positive currency changes and prices.

The group, which also owns Hellmann’s and Magnum, posted underlying price growth of 12.5% over the period.

It said cost pressures, which are set to carry forward into next year, have been driven by “higher raw material costs” and higher costs from suppliers due to energy and labour inflation.

Departing Unilever chief executive officer Alan Jope said: “Unilever has delivered another quarter of growth in challenging macroeconomic conditions.

“Underlying sales growth improved to 10.6%, led by further increases in pricing with only a limited impact on volume, and we now expect underlying sales growth for the full year 2022 to be above 8%.

“The global macroeconomic outlook remains mixed, and we expect the challenges of high inflation to persist in 2023.

“The delivery of consistent growth remains our first priority.”

Unilever revealed 13.6% underlying sales growth in its home care business, after lofty price increases more than offset a 3.6% fall in volumes.

Meanwhile, the company saw improved ice cream sales as it was buoyed by hot summer weather in Europe.