Labour claimed that it inherited a £22bn “blackhole” from the previous Conservative government.

In its final months in office, the Tories cut workers’ National Insurance payments by 4% in total, at a cost of around £20bn.

In her Budget Reeves announced that employers’ National Insurance contributions would rise from 13.8% to 15% from April this year.

She also confirmed that the National Living Wage would increase from £11.44 to £12.21 an hour, again from April.

Next’s price increase will only be on certain items of clothing.

But it said it said 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”.

The company also said that shoppers have continued to shift what they spend their money on. Instead of buying cheaper items, they are choosing mid to higher priced items.

“To be clear, consumers are not necessarily spending more overall, but buying fewer, marginally more expensive items,” it said in a Christmas trading update.

“We believe that this trend will continue into next year.”

Richard Lim, chief executive of Retail Economics, said there were “challenging conditions on the High Street”.

He said retailers had seen “successive waves of disruption” and rising costs would “really squeeze margins”.