A British supermarket chain with revenue of £10 billion that does not raise prices after Brexit could lose between £214.8 million and £737.1 million in profits, according to analysis by the Oliver Wyman consultancy

British shoppers may face steep price rises after Brexit as supermarkets attempt to stop profits from sliding by more than £700 million.

Household budgets will be squeezed after Britain leaves the EU, regardless of whether it strikes trade deals, according to a report by Oliver Wyman, the consultancy, as higher EU import costs put businesses under pressure.

Restaurant chains are particularly likely to struggle after Brexit, it warned, as rising prices will force consumers to cut back on non-essential spending.

If UK hopes of free-trade deals with markets such as the US and Australia fail to materialise, the study projects Brexit would cost households between £245 and £961 a year. Even if such deals are signed, it forecasts higher costs of between £134 and £758