Justin King, the chief executive of J Sainsbury, said yesterday that food inflation in British supermarkets was running well below the level suggested by official figures as he called for calm over the state of the economy.

Revealing a 28 per cent rise in pre-tax profits at Sainsbury’s in the past year, Mr King said he feared that the country was at risk of being talked into a recession, despite the caution raised by the Bank of England.

He added that the level of promotions in supermarkets — three in ten products are sold at a discount — meant that food inflation was running at a little over 2 per cent. The Office for National Statistics said on Monday that food prices in April were 6.6 per cent higher than a year ago.

Mr King admitted that customers were coming under greater pressure, but said: “Real inflation and, therefore, the real challenge in household budgets is perhaps less than is being reported. We will talk ourselves into a bad period if we convince ourselves it is bad and worse than it is.

“We are miles off anything you could technically call a recession.”

Sainsbury’s underlying pre-tax profits were £488 million for the year to March 22. Total retail sales rose 5.8 per cent to £19.3 billion.

The group’s success over the past three years means that Mr King will pocket a £3.5 million bonus this summer, with another £3.5 million due next year. About 1,000 senior managers will each receive £42,000 while 117,100 staff will share an average annual bonus of £400.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax