The chief executive of Next has warned Britain faces another year of 'anaemic' economic growth and falling employment.

Lord Wolfson, who is the FTSE 100's longest-serving chief executive, having been in the job since August 2001, sounded alarm bells over 'a rising tax burden that undermines national productivity'.

He said that the 'medium to long-term outlook for the UK economy does not look favourable'.

His remarks came as businesses have been urging the Chancellor to rule out further tax hikes at her 26 November Budget.

Wolfson also slammed regulation that 'erodes competitiveness' and government spending 'beyond its means'.

Next's analysis follows bleak jobs market data this week and will add to concerns as Wolfson said there was 'now strong evidence of a material squeeze on UK employment'.

The group says the jobs market has been impacted by 'rising costs, mechanisation, AI and new legislation', including Labour's controversial package of new employment rights.

Wolfson said: 'To be clear, we do not believe the UK economy is approaching a cliff edge. 

'At best we expect anaemic growth, with progress constrained by four factors: declining job opportunities, new regulation that erodes competitiveness, government spending commitments that are beyond its means, and a rising tax burden that undermines national productivity. 

'We first raised concerns about a potential weakening in UK employment in our report two years ago. Since then, vacancies have continued to fall, and PAYE payroll numbers are now moving backwards. 

'The problem appears to be that employment, particularly at the entry level, faces the triple pressure of rising costs, increasing regulation, and displacement through mechanisation and AI.'

His grim warning came as Next hailed an uptick in group sales of 10.3 per cent to £3.25 billion over the six months to July.

Profits rose 13.8 per cent to £515million after the business was boosted by warm weather and a cyber-attack disrupting rival Marks & Spencer.

And although investors did not receive another profit upgrade, the retailer stuck to its annual guidance for profits to rise 9.3 per cent compared to last year. They are set to top £1.1billlon.

The group is broadly seen as one of Britain's most reliable retailers after it last year achieved £1billion in annual profits, joining only a handful of other British retailers to have done so.

Tesco, Marks & Spencer and B&Q owner Kingfisher are the only other listed UK store chains to have raked in £1billion in profits in a single year.

Next shares slumped more than 6 per cent in early trading to 11,265p. 

Next is considered a bellwether for the UK retail sector and consumer spending because its performance can signal broader economic trends.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: 'Next breezed past its original sales guidance over the first half, driven by favourable weather, major disruption at M&S and impressive international growth.

'While Next isn't expecting it to drop off a cliff edge, it does expect anaemic growth at best. 

'The fashion powerhouse is clearly unimpressed by the current government's performance, which has brought about declining job opportunities, unfavourable regulation, unsustainable government spending, and rising taxes that make it harder for the economy to grow.'