Next has lowered its forecast for profit and sales due to the uncertain economic environment.

In its half year report, the fashion retailer said sales had risen by around 12 per cent and pre-tax profit had risen 16 per cent to £401 million.

Next said sales were lower in August as government measures including lowering corporation tax and easing labour supply had yet to take effect.

The retailer also cited problems with supply and rising inflation as reasons for lowering profit and sales forecasts.

The retailer expects sales to fall by 1.5 per cent in the second half of the year instead of a previously predicted rise of one per cent. The profit guidance for the full calendar year has dropped from £860 million to £840 million.

Commenting on the results, the chief executive of Next Lord Wolfson said: “We have always been clear that, even at the best of times, our internal forecasts represent an informed best guess.”

He added: “There are so many variables at play - energy, freight, employment, tax, economic migration, exchange rates, etc - that today, more than ever, it is not possible to predict the future on the basis of the past.”

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