UK Consumers Brace for Higher Taxes as Budget Looms, Warns M&S Chief

The head of Marks & Spencer has warned that British consumers should prepare for higher taxes in the upcoming government budget, as policymakers struggle to balance the books amid weak growth and rising public debt.

Stuart Machin, the chief executive of M&S, said that while shoppers have shown remarkable resilience through months of inflation and economic uncertainty, another round of fiscal tightening could squeeze household budgets further. Speaking to reporters ahead of the budget announcement, Machin cautioned that the cost pressures facing both businesses and consumers have left little room for error.

“The reality is that someone will have to pay for the state of the public finances,” he said. “Whether that comes through higher income taxes, reduced thresholds, or indirect measures, the impact will be felt across the economy, particularly on the high street.”

Machin’s warning comes as Chancellor Jeremy Hunt prepares to unveil a budget designed to reassure markets of the government’s fiscal discipline while addressing mounting social and political pressures ahead of next year’s general election. Analysts expect that despite calls from within the Conservative Party for tax cuts, the Treasury is more likely to introduce revenue-raising measures, especially on property and wealth.

For businesses like M&S, the combination of cautious consumer spending and higher operating costs has created an uneasy environment. Machin said that while the retailer’s performance had improved thanks to strong demand for clothing and food, inflation and energy prices remain major challenges. He added that the company has no plans to pass significant cost increases onto customers but warned that “persistent uncertainty” makes long-term planning difficult.

Economists say that households have already endured two years of declining real incomes, and even modest tax hikes could limit spending recovery during the crucial winter trading period. The Office for Budget Responsibility has forecast that living standards will take years to return to pre-pandemic levels.

Retail experts also noted that high street sales are slowing again after a brief rebound in early autumn, as consumers cut back on non-essential purchases. “We’re seeing fatigue set in,” one market analyst said. “People are being more deliberate about what they buy, prioritizing essentials and value.”

Machin echoed this sentiment, urging the government to strike a balance between restoring fiscal credibility and protecting consumer confidence. “Retail is the heartbeat of our economy,” he said. “If households are hit too hard, it will ripple through every sector, from manufacturing to logistics.”

As the budget draws near, economists expect a cautious and politically sensitive package that tries to stabilize the economy without deepening the strain on consumers. For now, though, retailers like Marks & Spencer are bracing for a winter of uncertainty, one that could redefine the relationship between spending, savings, and survival in post-crisis Britain.