Price hikes of more than 6 per cent on non-food items such as T-shirts, shoes and sofas are possible next year, because of the sterling’s collapse against the euro and the dollar.

Retailers and analysts said they expect the rises to come when supply contracts are renegotiated in spring. The increases could put a strain on retailers’ profit margins, because many pay in dollars when buying products from Asia.

The cost of freight has risen and there are fears that cotton prices could climb 20 per cent over the next 12 months. There is also a backlog of orders waiting to be cleared in Beijing, where manufacturing plants closed for the Olympic Games.

The dollar climbed to£1.7996 against the sterling on Monday – its highest since April 2006.

Topics