RETAILER Next became the latest company yesterday to threaten a price rise over George Osborne’s “national living wage.”

The fashion chain warned of possible price rises in the face of rising wage bills despite seeing profits rise 7.1 per cent to more than £347 million in the first half of the year.

Under the rebranded minimum wage, which comes into force next April, over-25s will be on £7.20 an hour, rising to at least £9 an hour by 2020.

The Living Wage Foundation estimates that pay of £7.85 an hour or £9.15 in London is currently needed to provide a basic cost of living.

But Next complained that implementing it could cost £2m a year initially, rising to £27m annually as the requirement grows.

It admitted, however, that only £11m would ensure that all staff were paid the minimum level, with £16m being used to maintain pay differentials between members of staff.

These additional costs could mean a 1 per cent price rise for consumers, it said, with overall wage rises adding a further £120m to annual costs.

This could allegedly add a further 5 per cent to price rises, meaning an increase of 6 per cent by 2020 as a result of wage increases.

Next is the second company this week to threaten the rises after Whitbread cried foul on Wednesday.

The Treasury said the slightly higher rate would cost business just 1 per cent of corporate profits.

To offset this the government has cut corporation tax to 18 per cent, while smaller firms will also have lower national insurance contributions.