“The Government risks losing the battle against inflation and working families are understandably worried,” said Helen Dickinson, Chief Executive of the British Retail Consortium (BRC), highlighting growing concerns over rising costs that continue to outpace wages.

Retailers warn that urgent action is needed to prevent further increases in food and household prices.

A recent survey of 2,000 people conducted by Opinium for the BRC found that 57% of respondents were most concerned about “prices rising faster than wages,” with 61% of working adults agreeing.

Concerns about tax rises (49%) and unemployment (26%) were lower. Dickinson emphasised the human impact:

“With many people barely recovering from the last cost of living crisis, the Chancellor will want to protect households and enable retailers to continue doing everything they can to hold back prices.”

Inflation rates remain above target

Official figures show UK inflation at 3.8%, almost double the Bank of England’s 2% target. Food inflation is even higher, reaching 5.1%, the highest since the 2022/23 cost of living crisis.

Dickinson warned that businesses are under significant pressure:

“The biggest risk to food prices would be to include large shops – including supermarkets – in the new surtax on large properties. This would effectively be robbing Peter to pay Paul, increasing costs on these businesses even further and forcing them to raise the prices paid by customers.”

The BRC notes that previous rises in employment costs and new packaging regulations have already contributed to retail price inflation, making the upcoming budget decisions particularly critical.

Looming budget proposals could affect high street prices

The Treasury is finalising plans to support the high street, including reductions in business rates for retail, hospitality, and leisure premises.

Dickinson urged careful policy choices: “Removing all shops from the surtax can be done without any cost to the taxpayer, and would demonstrate the Chancellor’s commitment to bring down inflation.”

The BRC has cautioned that if the surtax is applied to large stores, food inflation could remain above 5% well into 2026.

Retailers are calling on the government to balance fiscal policy with measures that prevent further price rises, particularly as public concern about the cost of living continues to grow.