Ahead of the pre-Budget statement, the British Retail Consortium has warned the Chancellor not to jeopardise retailers' future by reducing the disposable income of consumers or increasing business taxation.

During 2002, the UK economy has depended on a strong performance by the retail sector, but retailers need the right macro economic and fiscal environment to continue delivering growth and stability.

Bill Moyes, director general of the BRC, said: 'Consumer spending on the high street is being driven by value. Prices in the shops remain lower than they were five years ago. So customers are getting greater value and they know it.

'But despite that, sales are now growing at only half the rate they were six months ago. So any further pressure on the cost base of business could seriously compromise retailers' ability to keep prices down and to continue to improve value.' Moyes added that the main concerns were that the Chancellor would eat into personal disposable income which would affect high street sales. And also that increased taxing of the industry would be too difficult for retailers to absorb. 'Both must be avoided,' he said.