Retailers' overheads will rocket by £1bn when the next minimum wage hike takes effect, threatening jobs in the sector, the British Retail Consortium has warned.

Responses to the BRC's latest national minimum wage survey indicate that 25% of retailers will be forced to cut staffing costs when the next increase, from £5.05 to £5.35 for the over-22s, comes into effect on 1 October.

BRC director general Kevin Hawkins said: "Retailers are seriously concerned that the forthcoming review by the Low Pay Commission will continue the status quo and lead to further increases. We are urging the Commission to go back to basics and define what the ultimate goal for the minimum wage is."

Manufacturers have also waded into the row. Julian Hunt, FDF director of communications, said: "The UK food and drink manufacturing industry has always prided itself on paying well above the minimum wage. But for many small to medium-sized enterprises, almost double-inflation jumps are starting to bite."

Hunt called on the government to keep any increases in line with inflation "to ensure that our industry - Britain's largest manufacturing sector - remains competitive and an attractive place to work".