Two-thirds of British retailers expect to raise prices further over the next year as April's employer tax increases continue to drive up costs, a survey of finance chiefs showed on Thursday.
Trade body the British Retail Consortium said its survey of finance leaders at retailers together representing over 9,000 stores found 85% raised prices in their businesses after the government hiked employer National Insurance contributions and the national minimum wage.
It said 65% predict further rises in the coming year.
The BRC, which represents Britain's biggest retailers, predicts that food inflation will be up to 6% by the end of the year, putting more pressure on household budgets in the run up to Christmas.
Its survey also found that 42% of finance chiefs had frozen recruitment, while 38% had reduced job numbers in-store. Some 38% had also reduced investment.
The retail industry directly accounts for 9% of employment in the United Kingdom.
Highlighting concerns about further potential tax rises, the BRC said 56% of finance chiefs were "pessimistic" about trading conditions over the next 12 months, with just 11% optimistic.
The trade body appealed to finance minister Rachel Reeves not to add further costs to retailers in her annual budget later this year.
"It is up to the Chancellor to decide whether to fan the flames of inflation, or to support the everyday economy by backing the high street and the local jobs they provide," BRC CEO Helen Dickinson said.
The BRC survey took place between June 19 and July 11.
