Labour’s policies are strangling the UK economy and risk fuelling years of “anaemic growth”, the boss of high street giant Next has warned.

Lord Wolfson, the retailer’s chief executive, warned that the future of the UK economy “does not look favourable” because of new red tape and unsustainable government spending.

He said: “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.”

Lord Wolfson said he did not believe the UK economy was “approaching a cliff edge”. However, he said it was “likely to weaken going forward”, while the jobs market was already in decline. Next said its vacancies had fallen around 35pc compared to two years ago – reflecting a wider slowdown across the jobs market.

It comes amid growing alarm over Labour’s looming workers’ rights overhaul.

Earlier this week, the Telegraph revealed that four of the country’s largest business groups had written to Peter Kyle, the Business Secretary, warning him of the “chilling impact” the bill would have on hiring.

Under the new legislation, employers will have to replace zero-hours contracts with guaranteed shifts and workers will have the right to sue companies for unfair dismissal from the first day in a job.

Lord Wolfson said on Thursday the overhaul risked “unnecessarily depriving millions of the UK’s part-time workers of the opportunity to flexibly increase their earnings”.

While Next does not employ zero-hours workers, it does employ part-time staff. If the Government sets the threshold for what counts as “low-hours” work, these employees may be covered by the changes – meaning Next would have to either offer those staff more regular work at times when it did not need them or let them go.

Lord Wolfson said the changes could “severely inhibit UK service industries from effectively serving their customers at busy times”.

The Next chief said he was expecting UK employment opportunities to “diminish as we enter the second half” of the financial year, as the Chancellor’s National Insurance tax raid in April filters through into the economy.

He added: “We believe that this will increasingly dampen consumer spending in the second half of the year.”

It means that Next is forecasting a slowdown in UK sales growth in the second half of the year, slipping to 1.9pc from 7.6pc in the first six months to July.

Shares in Next fell by as much as 6.6pc on the update, making it the worst performer on the FTSE 100 on Thursday.

Next’s sales across the business were up 10pc in the first half to £3.1bn and profits were up 18pc to £509m.

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