Prices in shops and pubs will rise due to business tax rises announced in the Budget, two bosses have warned.
Andy Higginson, chairman of JD Sports and the British Retail Consortium, which represents supermarkets, said tax rises from April, including an increase in national insurance, would lead to higher costs for shoppers .
A rise in drinks prices could become apparent in just six months, added Simon Emeny, the boss of Fullers, which owns around 400 pubs and hotels.
Businesses are increasingly responding to the higher costs imposed by the Budget, but Chancellor Rachel Reeves said “businesses will have to absorb some of this through profits”.
From next April, employers will have to pay NI at 15% on salaries above £5,000, instead of 13.8% on salaries above £9,100 currently.
The minimum wage is also expected to increase from April.
On Wednesday, Mr Higginson warned: “I guarantee you today that if these measures go ahead as they are, without any sort of feathers, we are going to see significant price inflation.”
He called on the Government to “phase out” increases in national insurance and the minimum wage for businesses “over the next two to three years” rather than in April next year.
“We just need to make sure that the immediate impact of all of these things doesn't come all at once and that the economy has time to absorb these changes in a way that doesn't fuel inflation,” Mr Higginson told the BBC's Today programme. program.
The Chancellor's Budget included £40 billion in tax rises.
More than half of this will be paid by employers, with the national insurance increase expected to generate £25 billion a year.
But some fear the impact will still be felt by workers if companies decide to pass on the costs through higher prices and wage increases are limited.
“This doesn't look like a budget for workers. It doesn't look like a budget for growth. I think it will limit investment,” Fullers boss Mr. Emeny said.
The pub chain boss added that businesses have still not fully recovered their profits post-Covid and that announced budget measures have cost the hospitality sector “an extra £3.5 billion”.
“There is no way an industry like ours could sustain this level of cost and simply absorb it as profit,” he added.
The average price of a pint of draft lager in the UK was £4.47 in September, according to the Office for National Statistics, but the British Beer and Pub Association recently revealed that owners were making a profit of £12 pence per pint.
A London pub boss has said he is likely to increase the price of a pint by up to 40p following the budget.
Mr Higginson said the Budget created a “worrying” backdrop for businesses at a time when economic growth is desperately needed.
“(Labour) came into business before the election with the promise of being economically literate and pro-growth, and they do need growth – if you want to invest in public services… you have to get this growth, and it's difficult to see that the actions taken so far actually match this pro-business rhetoric,” he said.
