Consumers face price hikes next year as Budget costs bite, retailers warn
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Shoppers enjoyed lower prices in the final months of 2024, but retail experts have warned price hikes will be inevitable this year. The British Retail Consortium said there is 'little hope of prices going anywhere but up' in 2025, following recent Budget announcements that will raise costs for UK retailers by an estimated £7billion this year.
Chancellor Rachel Reeves announced in late October that the National Living Wage would increase by 77p to £12.21 per hour from next April. Employers' National Insurance rates will also rise from its current 13.8 per cent levy on wages above £9,100 to 15 per cent on salaries exceeding £5,000.
In addition, retailers will enjoy less generous business rates relief, which is being cut from 75 per cent to 40 per cent, up to a £110,000 cap per company. Helen Dickinson, the BRC's chief executive, said her organisation and retail finance bosses were predicting food prices will grow by 4.2 per cent in the latter half of this year.
More expensive: The BRC expects the recent Budget announcements will raise costs for UK retailers by an estimated £7billion this year. She added: 'Government can still take steps to mitigate these price pressures, and it must ensure that its proposed reforms to business rates do not result in any stores paying more in rates than they do already.'.
