Sterling’s weakness could leave the UK with more than £20bn of extra costs over the next year, raising the threat of higher prices for shoppers, according to reseach from PwC.

Followng prolonged pressure on the pound, which has seen the currency close to $1.5 since May, against $2 in May 2008, British retailers are feeling the impact of additional costs from their imports.

The extra cost will have to be absorbed, by retailers, suppliers or consumers and even allowing for better negotiation and an improving exchange rate, PwC estmates that the minimum additional cost for non-food retailers will be £10bn, or 5 per cent of the UK’s total non-food market.

Mark Hudson, retail leader at PwC, said: “At a time when UK consumers are watching their spending closely and consumer confidence appears to be improving, the last thing shoppers need is price rises. But since retailers’ margins are so tight, these extra costs will potentially spill over into the prices consumers are asked to pay.”