What's next?

The financial headlines masked an admission that the era of cheap clothing is effectively over after cotton prices reached a 15-year high following the Pakistan floods.

This demonstrates, once again, the extent to which unforeseen global factors can influence prices on the local high street, with Next now forecasting at least three to five years of low sales growth as the country braces itself for the full impact of the Government's austerity measures.

However, these forecasts should serve as another reminder to Chancellor George Osborne that his planned increase in VAT in the new year might prove to be counter-productive and tip Britain back into recession.

While the need to cut the deficit is urgent, it's also important that Mr Osborne takes heed of Next's warning about consumer spending – especially as the retailer's chief executive, Simon Wolfson, was made a Tory peer in May so that he could assist the Prime Minister and the Chancellor with their handling of the economy.