Britain’s largest retailers are warning that higher taxes and employment costs are pushing them to raise their prices and reduce head counts.

The British Retail Consortium (BRC) said Wednesday that a survey of 52 chief financial officers revealed that 67% would respond to the increase the U.K.’s national insurance (NI) payroll tax by raising prices.

In terms of staffing adjustments, 56% of respondents said they would reduce paid working hours and overtime, 52% will cut the head count at head offices, while 46% will reduce store staffing levels.

“With the Budget adding over £7 billion to their bills in 2025, retailers are now facing into the difficult decisions about future investment, employment and pricing,” said Helen Dickinson, CEO of the BRC.

During Prime Minister’s Questions in the House of Commons on Wednesday, Conservative Party leader Kemi Badenoch cited the BRC’s findings when she told Keir Starmer that “his chancellor ignored all the warnings and plowed ahead with an unprecedented borrowing spree, leaving all of us more vulnerable.”

The Chancellor of the Exchequer Rachel Reeves is facing mounting pressure after she unveiled £40 billion in tax rises in her October budget. Reeves and her Labour colleagues have repeatedly said they discovered a £22 billion “black hole” in the public finances after winning the general election in July, forcing them to make tough decisions.

But the tax hikes have prompted a backlash from the businesses that are set to bear the brunt of the burden. The Liberal Democrat Treasury spokeswoman Daisy Cooper conveyed the similar concerns on Tuesday when she said, “Let’s be blunt, the budget hasn’t worked. The chancellor says that the government’s number one mission is growth, but to date there are no signs that the government is going to deliver it.”

And Cooper described the rise in national insurance contributions as “self-defeating” because it “undermines growth, it does not unleash it, and it piles pressure onto struggling small businesses and high streets.”

The BRC’s Dickinson echoed that message. “As the largest private sector employer, employing many part-time and seasonal workers, the changes to the NI threshold have a disproportionate effect on both retailers and their supply chains, who together employ 5.7 million people across the country,” she said.

The BRC’s survey found found 70% of retailers were either “pessimistic or “very pessimistic” about trading over the next 12 months.

In November, the CEOs of 81 retailers wrote to the chancellor to express their concerns over the consequences of the budget.

The BRC estimates that the retail industry’s costs could rise by more than £7 billion this year, with £2.3 billion coming from the increase to NI costs, another £2.7 billion from an increase to the minimum wage and £2 billion from a packaging levy.