Asda chair says £100m hit from budget will be 'big burden' for wages

Asda has warned that measures in the government's budget will be a "big burden" for the supermarket chain, costing it £100m, and could prevent it from raising wages or hiring as many staff as it struggles to turn around falling sales.

- Joanna Partridge

The company's warning yesterday came as other UK retailers' share prices took a hit as stock market investors continue to digest the implications of the changes to employers' national insurance contributions (NICs) announced in Rachel Reeves's first budget as chancellor.

Marks & Spencer (-4.8%), JD Sports (-2.6%) and Tesco (-1%) were among the fallers on the FTSE 100, pulling it down to a three-month low. On the FTSE 250 index of smaller companies, the share prices of the bakery chain Greggs (-6%) and the pub group Mitchells & Butlers (-7.7%) also fell.

The share price of the prison contractor Serco dropped nearly 10% yesterday, making it the biggest faller on the FTSE 250, after it told investors changes to employer NICs will cost it about £20m a year. Serco's share price was also affected by its announcement that it had a key contract with the Australian government's Department of Home Affairs to provide onshore immigration detention facilities and services.