Next has warned the Government against 'stifling growth' with tax hikes as the retailer upgraded its profit forecast for the fourth time this financial year. 

The fashion retailer, which has been run by Lord Wolfson since August 2001, warned that any tax increases in the upcoming 28 October Budget could worsen weak consumer confidence.

Wolfson's comments came as Iceland boss Richard Walker also urged Andy Burnham to stop treating business as a ‘piggy bank’.

Further tax rises would spell bad news for the economy and exacerbate worries about rising inflation, higher mortgage rates and a bad jobs market, Wolfson said. 

He added: ‘The tax burden is at its highest level for over 60 years and seems to us to be at the point where further increases only risk stifling growth – and lower growth is likely to only worsen Government finances – a vicious circle.

'In our view, the best outcome for UK growth would be a credible plan to get Government spending under control – eliminating the fear of higher taxes – alongside supply side measures to boost growth.’

Next said there was likely to be a ‘modest’ reduction in its UK sales growth for the rest of the year. It predicts sales growth of 2 per cent for the final six months of 2026, compared to a previous forecast for 2.8 per cent.

But Wolfson said the sales decline would be a ‘slow, steady decline as the year progresses’ rather than a ‘precipitous decline.’

Retailers, including John Lewis and Frasers, have already urged the Government to not fund business rates reductions for pubs by whacking up the rates paid by large shops.

Wolfson said he did not agree with calls from industry groups, such as the British Retail Consortium, for tax cuts because the Government must keep its spending down.

He said the most important thing Burnham could do to stimulate economic growth would be to ‘liberate building’ by a radical shake-up of planning permission rules. Currently, the Government is ‘ruthlessly rationing land’, making it harder for data centres, hospitals and prisons to be built, he said.

Business rates should be ‘fairly portioned’ between companies that are doing well and those that are not, Wolfson said. And the system of property valuations must be changed so it is not as ‘glacially slow’ to reflect changes in High Streets.

Wolfson reiterated his concerns that Labour’s proposals to give workers 'guaranteed hours’ could make it harder for businesses to employ those looking for flexible work, such as students, and make service in shops worse.

He said the Government should set this guarantee around 4-8 hours to accommodate businesses and staff who require more hours during seasonal peaks.

Lord Richard Walker, who runs frozen food chain Iceland, also told LBC: ‘Andy Burnham has been Father Christmas so far, and it would be great if he'd start to get a bit more unpopular... We cannot, for the sake of all of us, keep taxing business and view it as some piggy bank that can constantly be raided.’ 

The gloomy remarks came as Next wowed investors again with the fourth profit upgrade this year after better than expected trading in the UK and overseas this year so far.

The company operates around 458 shops in the UK and Ireland, which employ more than 20,000 workers.

Pre-tax profits soared 10.5 per cent to £569 million in the six months to July. The business now anticipates annual profits will rise 8 per cent to £1.23 billion, compared to a previous forecast of 7.3 per cent. Sales are now expected to jump 6.7 per cent.

This was because UK full price sales rose 3.6 per cent, thanks to 7.4 per cent growth online offsetting a 1.7 per cent fall in stores.

The group recently withdrew from the race to buy ailing department store Harvey Nicks, which was picked up by rival retail giant Frasers. Next owns other labels including Reiss, FatFace, Joules, Cath Kidston, and Made.com, plus joint ventures running Victoria's Secret UK and Gap UK.

The retailer admitted it ‘could be doing better’ in some areas, including menswear, which posed ‘the biggest opportunity’.

It comes as rival Marks & Spencer has also been attempting to poach more of the menswear market with collaborations with celebrities including David Gandy.

Next said that its menswear ranges ‘became too focused on multiple variants of essentially the same item, serving the same customer’ after holding onto bestsellers ‘for too long’.

It has revamped some ranges but only expects to see ‘marked improvement’ until the second half of next year.

Some of its other brands have also lacked new products and styles and the business is keen to expand its menswear licenses.

Wolfson also said that consumers prefer ‘the authentic creativity of human beings’ compared to designs generated by Artificial Intelligence.

He said: ‘When it comes to artwork and colour, outstanding aesthetics require a human hand, creative eye and an emotional response. That means we are putting more emphasis on designers using techniques that connect them directly to the artwork – painting, drawing, screen printing, etc.’