Next says UK recovery not yet assured

Next chief exec Lord Wolfson has expressed concern at the prospect of an interest rate hike. Picture: PA

Britain’s consumer-led recovery is being driven by unsustainable levels of borrowing, one of the retail sector’s highest profile bosses has warned.

Lord Wolfson, chief executive of high street stalwart Next, also pointed to the potential “shock” from higher interest rates as he unveiled a double-digit rise in the fashion chain’s profits, putting it on track to overtake Marks & Spencer.

Wolfson, a prominent supporter of the Conservative Party, said: “Whilst the economy is getting better, we need to recognise that last year’s growth was driven very much by credit and that can’t go on forever.

“Until we see significant increase in the supply side of the economy – profitable investment and improved productivity – we cannot bank on a return to sustained growth.”

Recent official data and business surveys have pointed to an improving outlook for consumer spending, which underpins a huge slice of gross domestic product, though some retailers remain cautious.