A price war in the supermarket sector could be imminent following the announcement from Morrisons that it is planning to cut the price of 1,200 items by up to 60% as part of a nationwide campaign.

The trend of ‘price matching’ which is practiced by the other members of the four biggest UK retailers means that Morrisons’ rivals Tesco, Asda and Sainsbury’s will need to lower their prices as well if they want to remain competitive.

The cuts are designed to make the supermarket more appealing to shoppers who have defected to discounters such as Aldi and Lidl. "We see this not as a price war but more as a declaration of independence," chief executive Dalton Philips told reporters this week.