Next warns against growth-‘stifling’ tax rises in Budget

Wealth Club chief investment strategist Susannah Streeter believes that potential further tax increases in next month’s Budget will add to financial strain for both businesses and households.

It comes as Next chief executive, Lord Simon Wolfson, has warned the Government that growth will be further impacted by any proposed tax hikes, with the rising cost of living, increased mortgage costs and a weak jobs market already impacting consumers.

The retail company has cut its outlook for UK sales growth in the final six months from 2.8 per cent to two per cent, anticipating consumer spending to be down.

Streeter said: “On the face of it, Next’s results look rosy – it leaned on clever marketing and on-point ranges to rack up online sales during the summer heatwaves. But the UK high street performance was left lacking.

“There are concerns shoppers will also become more cautious as they look set to face higher bills and borrowing costs, leaving less left over for discretionary purchases. Consumer spending is a major engine of the UK economy, so if households pull back, retailers feel it first, but the weakness can spread much further.

“Further taxation would add to the strain for both businesses and potentially households, making it harder for the UK economy to pull out of stagnation. Simon Wolfson isn’t the first and will be far from the last business leader to call for a rethink on the government’s tax and spend approach, with lobbying set to intensify as we approach the Budget.”