Retail leaders warn that increasing business rates for large retailers could worsen inflation and harm high streets. The British Retail Consortium criticizes plans to hike charges on properties valued above £500,000, anticipating an additional £600 million tax burden. UK inflation recently rose to 3.6%, with food inflation at 4.5% due to poor harvests and supply chain issues. Retailers, operating on tight margins, are struggling with rising costs, including a £25 billion national insurance increase. A BRC survey indicates two-thirds of retail CEOs plan to raise prices.
This will add to inflation at the worst possible moment. Retailers are doing everything they can to shield customers from mounting pressures, but there's only so much they can absorb before costs start feeding through to prices.
UK inflation rising unexpectedly to 3.6 per cent in the year to June - its highest level since January 2024. Food inflation in particular jumped to 4.5 per cent, driven by poor harvests, disrupted supply chains, and rising operational costs.
Many retailers operate on tight margins and are absorbing significant pressures, including the £25 billion rise in employers' national insurance contributions introduced by Reeves in April.
If the chancellor presses ahead with this tax raid, it will heap pressure on businesses already at breaking point.
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