Two-thirds of major UK stores will hike prices and more than half will slash working hours as a result of Labour’s £25bn National Insurance raid, a survey reveals today, writes John-Paul Ford Rojas.

The findings from the British Retail Consortium (BRC) lay bare the dire impact of Rachel Reeves‘s Budget on the high street and cost of living.

They come as official figures today are expected to show inflation stuck at a stubbornly high 2.6 per cent last month – above the Bank of England‘s 2 per cent target.

The pain for consumers looks set to intensify over the course of the year according to the BRC figures which suggest food price inflation will rise to 4.2 per cent by the second half of 2025.

Some 67 per cent of firms said they plan to raise prices, with 56 per cent cutting back on hours, 52 per cent cutting head office staff and 46 per cent taking an axe to store worker numbers.

BRC boss Helen Dickinson said: “Retailers have worked hard to shield their customers from higher costs, but with slow market growth and margins already stretched thin, it is inevitable consumers will bear some of the burden.

“The majority of retailers have little choice but to raise prices in response to these increased costs, and food inflation is expected to rise steadily over the year.

“Local communities may find themselves with sparser high streets and fewer retail jobs available.”

The survey gathered responses from finance chiefs at 52 leading retailers with combined sales of £65bn a year, which employ 478,000 staff at 17,500 stores.

It found 70 per cent of firms were “pessimistic” or “very pessimistic” about trading over the next 12 months.

And 31 per cent said the higher costs would mean “further automation” – code for replacing staff with machines.

The BRC has previously estimated that the Budget will cost the sector £7bn a year.

In November, the bosses of 81 retailers including Tesco and John Lewis wrote to the UK Chancellor to warn of catastrophic consequences for inflation, employment and investment.

There was also further evidence yesterday that hospitality businesses will take a major hit, affecting operators in town and city centres across England.

Louise Maclean, director of sales and marketing at Signature group, which operates bars, restaurants and hotels across Scotland, employing 700 people, said it would mean big price rises.

She told the BBC: “Everything will have to go up about 10 per cent if we want to remain in business. We’re seeing a raft of hospitality closures, we’re seeing people pulling back hours.

“You only have to walk round George Street in Edinburgh at this time of year and 50 per cent of the venues are shut on Mondays and Tuesdays. Everyone is having to rein it back in.”