Asda has announced a round of price cuts worth £150 million, which is expected to kick off a Christmas price war.

Prices on 2,500 items, including festive food, George clothing, toys, gifts and electrical goods are to be slashed in stores across the UK.

Asda ceo Andy Bond said: “We’re lowering the cost of Christmas for millions of customers all over the UK, saving everyone money when they need it the most.

“Our research shows that the family budget is being stretched to the limit. That’s why we’ve invested £150m in our biggest-ever set of festive price cuts.”

The cost of Christmas is due to rise this year, reaching a record £11.8 billion, economists are predicting. Higher prices for food and drink will be largely responsible for an increase in total spending of £383m on last year, according to a study by the Centre for Economic and Business Research (CEBR).

The summer floods have led to dramatic increases in the prices of some veg lines, and the higher cost of food and drink is set to add £593m to bills this year, although this may be offset by other price reductions.

“Market-led food and drink price inflation will make festive eating and drinking more expensive,” said Douglas McWilliams, chief economist at the CEBR.

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