HOMEWARES brand Dunelm has warned customers will face further price hikes as it battles to maintain profit margins in the face of the Brexit-induced collapse in the value of the pound.

The retailer, which has a store at Clifton Moor in York, said in its half-year trading update that costs were starting to rise and these would be passed on to consumers.

It is understood some 22,500 products out of 30,000 lines will see price rises.

A spokesman said: “Retail prices have been increased on a small number of products to negate the impact to margin; we expect to put through further price rises on a number of categories in the second half, allowing gross margin to remain broadly flat in the second half, compared to the same period last year.” The pound has fallen by about 16 per cent against the US dollar compared to its pre-referendum peak, and approximately 10 per cent against the euro. The result has been a sharp rise in import costs for UK businesses.