UK Retailers Brace for Further Price Hikes Amid Rising Costs

In a recent survey, two-thirds of British retailers indicated that they anticipate increasing prices further in the coming year, as they face escalating costs stemming from April's employer tax hikes. The study, conducted by the British Retail Consortium (BRC), involved finance leaders from retailers operating over 9,000 stores.

The survey revealed that a significant 85% of these businesses have already raised prices following government-imposed increases in employer National Insurance contributions and the national minimum wage. This price trajectory coincides with Britain's annual rate of consumer price inflation reaching 3.6% in June, a level not seen in over a year. Predictions suggest that inflation may exceed the Bank of England's forecast of a peak at 3.7% come September.

The BRC estimates that food inflation could climb to 6% by year's end, further straining household budgets. Additionally, the survey indicated that 42% of finance chiefs have frozen recruitment efforts, while 38% have reduced both job numbers and investment. The retail sector, which represents 9% of UK's employment, is increasingly worried about potential future tax hikes. Helen Dickinson, CEO of BRC, urged finance minister Rachel Reeves to refrain from adding to retailers' costs in the upcoming budget, emphasizing the importance of supporting the high street and local employment.

(With inputs from agencies.)