The boss of Next has said that the current squeeze on incomes is worse than the damage wrought during the financial crisis, as the retailer warned the war in Ukraine will fuel an 8pc rise in prices this autumn.
Responding to a question about how the current environment compares with the cost of living crisis in the fallout from the financial crisis, Lord Wolfson, chief executive of Next, said: “I think this is much more widespread. We did see increases in our own prices then  of about 4-5pc in autumn/winter.
“What we’re seeing now is very different because the rises are much sharper and also what we’re seeing that we didn’t see in 2011 is a sharp rise in wages as well. And that is the hardest thing.
“Actually, we have some insight from our history and 2011, but we’ve never seen anything like this before, we don’t quite know how it’s going to pan out.”
It came as Next said it would increase prices by an average of 8pc this autumn amid staff shortages and disruption resulting from Russia’s invasion of Ukraine. The retailer said prices for homewares will jump by 13pc and clothes prices will rise by 6.5pc in the second half of the year.
Next still predicts sales will grow this year but not by as much as first thought, because consumer confidence will be more subdued. Profits are expected to total £850m profit this year, albeit this is £10m less than it predicted in January as a result of its decision to halt sales in Russia and Ukraine.
Sales will be £85m lower as a result, the company said.
Lord Wolfson said high shipping costs were one of the biggest drivers of inflation.
He said: “Best case scenario is that we’re looking at an easing of pressure in nine to 12 months’ time.”