UK Retail Sector Faces Price Hikes and Cost Pressures

UK retailers are facing significant challenges as shop prices saw a 1% deflation in December 2024, the sharpest decline in over three years, primarily attributed to the timing of Black Friday sales. However, the British Retail Consortium warns that rising costs from new taxes and employment expenses could lead to increased prices in 2025. Major retailer Next anticipates a slowdown in sales growth and is preparing for a 1% price increase, following a £67 million rise in wage costs due to government policies. The British Chambers of Commerce reports a decline in business confidence, with 63% of firms expressing concerns about tax increases and 55% planning to raise prices in the coming months. Overall, the retail sector is bracing for a challenging year ahead, with potential job losses and further price hikes looming as businesses navigate these financial pressures.