Businesses across Suffolk have said they are struggling to keep prices low in the face rising supply costs.

The news comes as sales across all British retail sectors sharply fell by a larger-than-expected 1.6% in August, with people less willing to spend in face of increasing bills.

Steve Magnall, joint owner of Two Magpies Bakery, highlighted his concerns about declining profit as one of the company's branches saw energy bills rise by 400%.

"We're quite nervous because our costs are rising," he said.

"We've seen our energy bills rise from anywhere between 127% in one location to 400% in another.

"At one site, our electricity costs rose have risen from £4,000 to £9,200 a month.

"But we're absorbing these costs ourselves to avoid putting prices up."

Ipswich and Felixstowe-based home fragrance and wax melts business, Cosy Aromas, said they were also seeing a similar trend.

"Supply costs skyrocketed by 25% across the entire industry," said co-owner, Tamar Mayne.

"Since the start of the year, we've also seen a decline in sales.

"We haven't put prices up but we are putting a reduced amount of wax in our products.

"Unfortunately, the rising supplier costs are forcing us to change the way we do business."

UK inflation, which is the rate at which prices rise, is currently running at a near 40-year high, despite slipping to 9.9% from July's 10.1%.

News of a further decline in sales has caused fresh uncertainty amongst experts about the state of the UK economy.

George Debman of Ipswich's G Debman butchers said he has noticed a dip in trade "as more people are watching their pennies".

The business has managed to keep prices low through purchasing all stock live - what the owner described as "good buying".

However, Christmas could be set to throw a spanner in the works.

"I have no doubt that the price of poultry will go up," said Mr Debman.

"We're already not selling ducks and geese due to the recent bird flu outbreak.

"I am really worried about Christmas as we want to keep our prices low but supply costs could be a big problem over this period.

"As far as other costs are concerned, I'm fortunate as we're on a fixed long-term energy contract.

"But I am aware of other businesses in the trade who have seen bills skyrocket."

Sweet William's Bakery in Chantry Park, Ipswich, is also doing its best to keep prices low but owner, Zoe Hayman-Cox, said increases are becoming "a real possibility".

"So far, I haven't touched costs," she said.

"But my supply costs are rising dramatically, Things like butter and packaging have risen so quickly and some ingredients have almost trebled in price.

"I would be so disappointed if I had to put prices up, but I'm beginning to realise that I may have to,"