But retailer warns that growth this year will be slower amid continuing pressures on UK employment…

The high street retailer Next expects its annual profits to top £1.1Bn after it rang up much stronger sales than expected over Christmas – but it has warned that 2026 will be tougher amid “continuing pressures on UK employment”.

The clothing and homewares retailer said it was improving annual profit forecasts by £15M, its fourth upgrade in eight months, after UK sales rose by 5.9% in the nine weeks to 27 December, far stronger than the 4.1% expected.

The FTSE 100 company said sales were aided by higher stock levels than the prior year when deliveries were delayed by disruption in Bangladesh.

Sales for the year to the end of January are expected to rise 10.7% to £5.6Bn and pre-tax profits to be up 13.7% to £1.15Bn. It had previously said profits were likely to increase by 12.2% to £1.14Bn and sales to rise 9.7%.