Aldi has thrown down the gauntlet to traditional supermarkets and vowed to offer the lowest prices this year, as surging inflation piles pressure on household budgets.

The German discounter’s pledge comes amid warnings of soaring energy bills and planned tax increases, as well as a 3.5pc jump in grocery prices in December.

Giles Hurley, UK chief executive, said he wanted Aldi to continue to be Britain’s cheapest supermarket.

“The top priority for most families this year will be managing their household budgets in the face of rising living costs,” he added. “Aldi will always offer the lowest prices for groceries, no matter what.”

Since the pandemic hit, Tesco and Sainsbury’s have slashed prices on hundreds of everyday essentials in a bid to close the price gap with Aldi and Lidl.

Only last week Sainsbury’s added a further 30 fresh items to its Aldi price match campaign, bringing the total to 260 products. Tesco expanded its range to match Aldi’s 650 items in October.

Clive Black, a retail analyst at Shore Capital, said: “Aldi has always said ‘if they go low, we’ll go lower.’ Ten years ago, they had a massive price advantage, but today Tesco and Sainsbury’s are matching them on hundreds of prices. That is a significant change in the competitive state of the industry.”

However, he said Aldi’s vow would keep the major supermarkets “honest”.

The German discounters were “not going away. Any of the big four just have to look in the rear view mirror; if you let them get away from you, they can cause a lot of damage.”

After the financial crash, the major grocers were collectively complacent about the expansion of Aldi and Lidl in the UK. They now control 14pc of the grocery market between them.