Businesses to raise prices after Budget

The British Chambers of Commerce (BCC) has warned business confidence slipped to its lowest level since the Liz Truss mini-Budget in autumn 2022.

In its quarterly survey of 4,800 member businesses, 63% cited concern about taxation – the highest level of tax concern since 2017 when the BCC started asking this question.

Meanwhile, more than half (55%) now expect prices to go up in the next three months, with labour costs as the biggest driver. This compares with 39% in the third quarter of 2024.

Only 20% of businesses surveyed said they have increased investment plans over the last quarter – down from 23% in the third quarter. In addition, 24% of firms said they have cut back investment plans, compared with the third-quarter figure of 18%.

David Bharier, head of research at the BCC, said: "This dataset is a clear signal that business sentiment has been significantly impacted following recent policy announcements, notably National Insurance increases. Taxation is now by far the biggest concern, cited by 63% of businesses.

"Faced with rising costs, our survey paints a difficult picture and shows businesses are having to make some very difficult decisions. Many tell us they expect to push up prices and cut back on investment and we expect this to lead to a low- or no-growth economic climate in the coming months."