British Retail Consortium director-general Kevin Hawkins emphasised the need for Brown to help retailers achieve sustainable growth in sales, productivity and employment by easing consumer concerns over the housing market. He also called for more sensitivity by the Government on the National Minimum Wage.
He said: 'Trading conditions are very tough. Retail prices are nearly 2 per cent lower on average than this time last year, while increases in the National Minimum Wage, rents and energy prices are inflating our industry's cost base. We urge the Chancellor to give consumers something to cheer about.'
Evolution analyst Nick Bubb was also concerned that retailers' profit margins could be further squeezed by any VAT increase. He said: 'Retailers will be anxious to hear of any changes to VAT and we are certainly always nervous about this because it is such an easy way to tax retailers' profit margins, on the view that intense competition will stop them passing higher VAT on to consumers in higher prices.'