Next to raise prices by 1% to offset £67m rise in costs

Next has said it will increase prices by 1% this year to help offset a £67m rise in wage costs driven by budget tax changes, which it expects will slow UK sales growth this year.

- Sarah Butler

The fashion and homewares retailer said the tax increases for employers announced in October and their potential impact on prices and the job market are beginning "to filter through into the economy".

However, the Next chief executive, Simon Wolfson, said the alterations to price and sales expectations were "not a big change", and he did not think the budget changes had hit trading in the run-up to Christmas.

The group upped its profit forecasts by £5m after better-than-expected sales in the trading period.