UK retail price hikes are expected to persist throughout 2025, as major tax and wage reforms introduced in April continue to pressure margins across the sector. A new survey by the British Retail Consortium found that 65% of retail finance leaders anticipate raising prices again, with many already responding to cost pressures by freezing hiring or cutting investment.
April’s Budget Triggers Fresh UK Retail Price Hikes
A majority of British retailers plan to raise prices further over the next 12 months, according to a survey by the British Retail Consortium. The findings point to sustained UK retail price hikes triggered by April’s increase to employer National Insurance contributions and the national minimum wage, which together have significantly raised operating costs.
Eighty-five percent of surveyed retail finance chiefs said they already raised prices following the budget changes. Two-thirds expect to do so again.
Retailers Freeze Hiring and Cut Investment Amid Cost Pressures
Retail employers, who make up 9% of the UK workforce, are increasingly defensive. Forty-two percent have frozen recruitment, while 38% have cut headcount or reduced investment spending.
“These are difficult but necessary adjustments,” said a finance director at a nationwide chain. “The April budget left no room to absorb costs without passing them on.”
Inflation and Wage Growth Drive Pricing Uncertainty
Consumer inflation hit 3.6% in June, just below the Bank of England’s projected 3.7% peak. Retailers report that food inflation in particular could rise to 6% by December, compounding household strain during the holiday shopping period.
“We’re already seeing more price-sensitive behavior from consumers,” said one executive. “Further UK retail price hikes could dampen demand.”
BRC Calls on Treasury to Avoid New Burdens
Only 11% of retail finance leaders expressed optimism for the next year. Fifty-six percent described their outlook as pessimistic, citing concern over further government-imposed costs.
“The Chancellor must decide whether to support the high street or fuel inflation,” said Helen Dickinson, CEO of the British Retail Consortium. “UK retail price hikes are a direct result of policy decisions.”
The BRC is pressing Chancellor Rachel Reeves to avoid further tax measures in the autumn budget.
Retailers Say Future Tax Rises Will Hit Prices Directly
With limited flexibility left, retailers warn that any new fiscal pressure will lead to more price increases.
“Retailers cannot absorb these costs indefinitely,” said a finance executive at a major grocery chain. “Without relief, UK retail price hikes are inevitable.”
