Argos is expected to increase its prices by 5 per cent in its new catalogue, as the retailer is hit by the decline of sterling against the dollar.

Around 54 per cent of the 18,000 products in the Argos catalogue, due to launch on Wednesday, are made in China and around 8 per cent from other east Asian countries, according to The Guardian.

The pound remains 20 per cent below its level of a year ago, which has pushed up the prices of goods imported from these areas.

Terry Duddy, chief executive of Argos owner Home Retail Group, has warned that prices would have to rise, and that retailers could not absorb the increases in import costs, although for some retailers the rises in costs has been partially offset by the drop in shipping rates.

PricewaterhouseCoopers said rising import costs would cost shoppers £10bn, assuming shops pass on half the £20bn in extra costs.

Marks & Spencer is also planning price hikes of 2 to 3 per cent due to currency movements.