The latest RPI inflation figure could lead to retailers facing a damaging £350m rise in business rates next April, the British Retail Consortium has warned.
The convention is that business rates in England, Scotland and Wales rise each April in line with the previous September's RPI, which today has been announced as 5.6% - the highest level for 20 years.
Last April, retailers had to cope with a 4.6% increase in rates, and the BRC is urging the Government to consider the damage to jobs and investment that would be done by another increase on that scale, and make sure next year's rise is considerably lower.
BRC director general Stephen Robertson said: "Basing business rates rises on the previous September's RPI is a lottery and retailers have just seen a losing number come up. With trading conditions staying tough, an increase on this scale would have a hugely detrimental effect on retailers' ability to invest and create jobs.
"Retailers already pay 28% of all business rates, a bigger proportion than any other sector. They were expected to cope with a near-5% increase this year. Some didn't survive it. It cannot be right to hit them with another massive blow next April. The Government should impose a much lower increase and, for the longer-term, review the system so that future increases are more predictable and more affordable."