Shops fear that they will be ‘beaten’ in the Budget

Shops fear they will be ‘hit’ in the budget as nervous households rein in their spending.

The High Street is gearing up for a series of punishing tax increases – including an increase in national insurance paid by employers and business rates.

The increases – which Chancellor Rachel Reeves will outline in her budget on October 30 – come on top of a raft of new rights for workers that have created even more regulation for businesses.

To make matters worse, there are signs that shoppers are holding back as concerns about what Reeves is planning erode confidence.

Retail sales rose just 0.3 percent in September after rising a much stronger 1 percent in August, according to the Office for National Statistics. The slump came as Reeves prepares a budget that could include more than £40 billion in tax rises as she struggles to pay for Labour’s spending pledges.

Kris Hamer of the British Retail Consortium said: ‘Retailers are nervously awaiting the Budget to see if they will be hit by more costs, particularly the aftermath of changes to employers’ national insurance contributions, as well as the inflationary rise in business rates.

“These changes would put more pressure on an industry that already pays far more than its fair share of business taxes.”

Elliott Jordan-Doak, senior UK economist at Pantheon Macroeconomics, said “government doom-mongering” had damaged confidence.