Next boss Lord Simon Wolfson has urged Chancellor John Healey to avoid further tax rises at next month’s Budget, warning they risk putting additional pressure on consumer spending and economic growth.

The chief executive called on the government to instead focus on controlling spending and introducing measures designed to boost economic growth ahead of Healey’s first Budget on 28 October.

Next lowered its forecast for UK sales growth in the second half of its financial year from 2.8 per cent to two per cent, citing rising inflation, higher mortgage costs and a weaker employment market.

Wolfson said: “These worries will only be compounded if they are accompanied by tax increases.”

Next said it believed further increases in taxation risked restricting growth, arguing that weaker economic expansion could in turn put further pressure on the public finances.

The retail boss called for a “credible plan to get Government spending under control” alongside supply-side reforms aimed at driving growth.

Despite Wolfson’s caution over the UK consumer outlook, Next posted a strong first-half performance and raised its full-year profit guidance for the fourth time this year.

Underlying pre-tax profit climbed 10.5 per cent to £569m during the period, while full-price sales increased 7.7 per cent. The fashion giant lifted its full-year pre-tax profit forecast by £12m to £1.255bn.

UK full-price sales rose 3.6 per cent, driven by a 7.4 per cent increase online, while store sales fell 1.7 per cent. International online sales jumped 23.9 per cent.

Next said its concerns over the domestic market centre on pressure from inflation, mortgage costs and employment, although stronger international trading is expected to help offset slower UK growth during the remainder of the year.

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