Tories accuse Labour of trashing economy in six months with taxes and red tape as retailers warn of price hikes in grim 2025_Nhy
Tories accused Labour of trashing the economy today as retailers warned of looming price hikes.
Shadow business secretary Andrew Griffith said Keir Starmer had created a ‘hostile environment’ for firms in a ‘disastrous’ first six months.
The stinging assessment, in an article for MailOnline, came as high street giant Next warned over slowing sales growth and said it will need to hike prices due to the impact of the Budget.
Research by the British Retail Consortium also found underwhelming sales in the crucial Christmas run-in, while it cautioned that volumes are likely to fall this year.
And separate figures from analysts Kantar today suggest inflation at supermarkets jumped from November’s 2.6 per cent to 3.7 per cent last month – the highest level since March.
Rachel Reeves mounted a massive raid on employer national insurance in her Autumn fiscal package, as well as ramping up the minimum wage.
Tories accused Keir Starmer (pictured) of trashing the economy today as retailers warned of looming price hikes
Shadow business secretary Andrew Griffith said Keir Starmer had created a ‘hostile environment’ for firms in a ‘disastrous’ first six months
Mr Griffith said more issues were looming with the Employment Bill championed by Angela Rayner threatening to make it ‘impossible to sack anyone who is underperforming’ – and the economy already showing signs of stalling.
‘Labour has always been the anti-business party, and in just six short months they have reminded everyone why,’ the MP wrote.
‘Since Starmer took power, there have been a long line of depressing economic statistics…
‘Business confidence is the lowest it’s been since the height of the global pandemic.
‘These statistics are not surprising to anyone who has spoken to real businesses since Rachel Reeves’ disastrous Budget.’
Next said it is facing a £67million surge in its wage costs in the year to January 2026 after the Labour Government announced plans to increase employer national insurance contributions and the minimum wage from April.
It said it will need to push through an ‘unwelcome’ 1 per cent rise in prices as part of efforts to help offset the hit.
Next also warned that sales growth will pull back sharply over the year ahead as the Budget measures – which both take effect in April – are set to hit jobs and send prices rising across the economy.
It came as the firm reported a better than expected 5.7 per cent rise in underlying full-price sales for its fourth quarter so far, and upped its full-year pre-tax profit outlook once again, pencilling in a 10 per cent jump to £1.01billion.
This compares with previous guidance for a 9.5 per cent rise to £1.005billion.
But over the new financial year to January 2026, it expects sales growth to slow to 3.5 per cent and for group profits to increase by a more muted 3.6 per cent to £1.05billion.
Next said: ‘We believe that UK growth is likely to slow, as employer tax increases, and their potential impact on prices and employment, begin to filter through into the economy.’
Rachel Reeves mounted a massive raid on employer national insurance in her Autumn fiscal package, as well as ramping up the minimum wage
There have been signs the economy is stalling in the wake of the Budget
It also warned that overseas sales growth – which had surged to 24 per cent in 2024-25 – will fall back as it reins in marketing spend after investing heavily in this over the past year.
‘We do not believe we can profitably increase our overseas marketing expenditure by the same percentage next year, and expect the growth to be closer to 20 per cent,’ it said.
The firm said an expected 1 per cent increase in prices will offset around £13million of its higher wage bill.
It will look to make overall savings of £23million in the face of the cost increase, with measures also including ‘improved working practices and other operational efficiencies in our warehouses, distribution networks and stores’.
