Next has promised it will not raise prices this year as factory gate prices stabilise for the first time in three years.

The high street bellwether pledged there would be “zero inflation in our selling prices” as it said the cost of selling its own products was diminishing.

The pledge comes despite it expecting to increase its wage bill this year by around £60m, which it will mitigate by increasing its margins by £17m.

In a trading update, the retailer said: “Despite this increase in margin, we do not anticipate that selling prices will increase in the year ahead.  

“In fact, without the anticipated margin gain, prices would have fallen marginally as a result of continued reductions in factory gate prices.”

Next increased its full-year profit before tax guidance by £20m to £905m, up 4pc on the previous year.

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