Retailer says festive trading was better than expected but forecasts UK sales growth will slow this year

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Next has said it will increase prices by 1% this year to help offset a £67m rise in wage costs driven by budget tax changes, which it expects will slow UK sales growth this year.

The fashion and homewares retailersaid the tax increases for employers announced by the government in October and their potential impact on prices and the job market “begin to filter through into the economy”.