YORK'S struggling high street could be hit with a further blow - a business rates hike of more than two per cent.

Real-estate company Altus Group is predicting that businesses will see their costs soar by the equivalent of 2.1 per cent across the UK - as rates increase in line with inflation.

York trader Phil Pinder said that the increase - which may be announced later this month - could be devastating for local businesses in the city.

He said: “This increase will hit an already struggling high street in York.

“This is a real issue for local traders, who are already feeling the strain with the current business rate, but, unfortunately, nobody in Westminster seems to be discussing the issue.”

Robert Hayton, head of UK business rates at Altus Group, said: “With major retail and hospitality businesses reducing their estates and high level of rates as a contributory factor, I urge the chancellor to take the bold step of being the first chancellor to freeze the multiplier since the national business rates system was introduced in 1990.”

Cllr Andrew Waller, executive member for economy and planning at City of York Council, said: “We are consulting with businesses on what changes local companies would like the council to lobby for in national policies to create a more level playing field between the high street and internet-based companies.

“As business rates are set by the national government, but collected by local authorities, any changes would need to be through national legislation.

“There has been a shortage of national policy on this matter and I have asked council officers to consult with business organisations in the city."

Rain Newton-Smith, Confederation of British Industry (CBI) chief economist, said: “The business rates system is in urgent need of reform and the government should consider initiating an independent review, looking at how we build a fair business rates system for high streets across the country. They could use the budget as an opportunity by announcing a 12-month holiday on new properties and property improvements.”

Nationally, business rates income has risen by almost a third since 2010.