Two thirds of top retailers have warned that they will be forced to increase prices to cope with the rise in National Insurance costs, adding more pressure on the Chancellor.

In a survey conducted by the British Retail Consortium (BRC), 67% of 52 chief financial officers stated they would raise prices in response to increases in employers’ National Insurance Contributions from April.

Over half (56%) said they would be cutting paid hours and overtime, while 46% revealed they would have to reduce staff numbers in stores and 31% said the increased costs would lead to further automation. A significant 70% expressed "pessimistic" or "very pessimistic" views about trading conditions over the next 12 months, with only 13% feeling "optimistic" or "very optimistic".

The biggest concerns, cited by over 60% of the CFO’s, were falling demand for goods and services, inflation for goods and services, and the increasing tax and regulatory burden. The BRC highlighted the clear impact of the on wider business investment, with 46% of CFOs saying they would cut capital expenditure and 25% expecting to delay new store openings.

Some 44% of respondents anticipated reduced profits. Following a survey, 81 retail chief executives have penned a letter to the Chancellor expressing their concerns about the economic impact of the Budget.

They claim that due to changes in employers' National Insurance contributions, increases in the National Living Wage and the reformed packaging levy, the industry's costs could surge by over £7bn in 2025.

The CFOs also predict that shop price inflation, currently at -1%, will rise to an average of 2.2% in the second half of 2025. Last week, the BRC reported that they expect food inflation to reach an average of 4.2% in the second half of this year.

These findings come as Chancellor continues to face pressure amid market turmoil. This follows Sir appearing to waver in his support for the Chancellor when he expressed confidence in her but declined to confirm she would retain her role until the next .

Downing Street later clarified that Ms Reeves would remain in post for "the whole of this Parliament". BRC chief executive Helen Dickinson stated: "With the Budget adding over £7bn to their bills in 2025, retailers are now facing into the difficult decisions about future investment, employment and pricing."

She added: "As the largest private sector employer, employing many part-time and seasonal workers, the changes to the National Insurance threshold have a disproportionate effect on both retailers and their supply chains, who together employ 5.7 million people across the country.

"Retailers have worked hard to shield their customers from higher costs, but with slow market growth and margins already stretched thin, it is inevitable that consumers will bear some of the burden.

"The majority of retailers have little choice but to raise prices in response to these increased costs, and food inflation is expected to rise steadily over the year. Local communities may find themselves with sparser high streets and fewer retail jobs available."