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Major supermarkets Asda and Tesco have responded to higher inflation figures by slashing their prices on thousands of products.

Inflation rose again last month to 4.7 per cent from 4.4 per cent in July, with energy bill rises and food prices driving up growth.

According to Tesco, UK consumers are more concerned about food prices today than they have been for the last 20 years.

Tesco is adding 350 new products to its Discount Brands at Tesco label and is cutting prices on hundreds more products in a bid to become "Britain's biggest discounter".

Tesco commercial director, Richard Brasher, said: "This is discount shopping with all the added quality and service customers want and have come to expect from Tesco."

Asda announced over 5,000 price cuts yesterday and predicted food inflation has peaked.

The Walmart-owned retailer is cutting the price of every Smart Price product and said value-conscious shoppers could slash their weekly shopping bill by more than 50 per cent.

"For the past 11 years we have been voted the UK's lowest priced supermarket. I'm determined that ASDA continues to win this coveted award which underlines our commitment to always offering our 17 million customers everyday low prices," said Asda chief executive Andy Bond.

The big four supermarkets – Asda, Morrisons, Sainsbury's and Tesco – have all been focussing on their price credentials to attract value-conscious customers.

Meanwhile, discount grocers Aldi and Lidl have reported an increase in their market share as consumers tighten their belts.