Shops warn of further price rises amid fears of autumn tax raid
Two-thirds of bosses said they expect to raise prices in the months to come, according to a survey by the British Retail Consortium (BRC), with 88pc of respondents listing taxes and regulation as their main concern.
Helen Dickinson, chief executive of the BRC, said the Chancellor will 'fan the flames of inflation' and risk job losses if she launches another tax raid.
It comes after the survey found that 85pc of bosses have already increased prices in recent months owing to Ms Reeves's decision to increase both employer National Insurance contributions (NIC) and the minimum wage.
This has led to food prices climbing by 4pc over the past 12 months, reigniting inflation fears across the country.
At least a third of respondents also said they had reduced the number of staff in stores.
Ms Dickinson said: 'Retail accounts for 5pc of the economy yet currently pays 7.4pc of business taxes and a whopping 21pc of all business rates.
'It is vital the upcoming reforms offer a meaningful reduction in retailers' rates bill, and ensure no store pays more as a result of the changes. If instead, the Chancellor chooses to add further costs to retailers and high streets, it will be the British public who suffer from the knock-on impact on inflation.'
The warning from the BRC coincided with a separate business survey from Lloyds, which revealed deepening gloom in retail and manufacturing but growing confidence in the services sector.
Overall pessimism among employers also fell to its lowest level in two years, according to the Recruitment and Employment Confederation.
'Businesses are beginning to shake off some concerns on investment and hiring that they have carried for almost three years,' said Neil Carberry, the industry group's chief executive.
'Despite a spring battering from the NICs rise, inflation and other policy costs, there is hope that businesses can step up their trading in the second half of the year. Getting investment plans unblocked will turn firms from delayers of recruitment to hopeful hirers.'
However, warnings have been made by retailers as economists fear the Chancellor will have to raise taxes by as much as £25bn to restore the headroom against her borrowing rules.
Ms Reeves hailed the rise in business confidence in the Lloyds survey.
'Strong business confidence is further proof that businesses are backing Britain. Since the election, we have struck three major trade deals, invested more than £1bn to fix our national infrastructure and seen four interest cuts from the Bank of England,' she said.
'Our Plan for Change is working but I know there is more to do to kickstart economic growth so we can put more money in working people's pockets.'
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