The majority of UK businesses are planning to raise prices in the coming months as confidence falls to its lowest level since 2022, according to the British Chambers of Commerce (BCC).

The latest Quarterly Economic Survey, conducted after the Chancellor’s recent Budget, which gathered responses from more than 4,800 businesses, shows 55% of business expect to increase prices in the next three months, with labour costs identified as the main driver. This compares with 39% in the third quarter of 2024.

Business confidence has also taken a sharp hit, with only 49% of firms anticipating turnover growth over the next year, down from 56% in the previous quarter.

Taxation has now overtaken other concerns, with 63% of businesses citing it as a significant worry following the Budget, up from 48% in Q3. This is the highest level of concern recorded since the BCC began tracking this metric in 2017.

Investment has also faltered, with just 20% of businesses increasing their plans in the past quarter, while 24% have scaled back. Retail and hospitality firms reported the sharpest cuts, with 42% reducing their investment plans.

BCC head of research David Bharier said: “This dataset is a clear signal that business sentiment has been significantly impacted following recent policy announcements, notably national insurance increases.

“Confidence has now dipped to 2022 levels, with less than half of firms expecting improved turnover over the next year and over a fifth now expecting it to worsen.

“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.”

Click here to sign up to Retail Gazette‘s free daily email newsletter