Nearly half of UK firms said they intend to raise prices over the next twelve months in an additional blow to hopes for rate cuts soon from the Bank of England.
According to the British Chamber of Commerce, some 46% of its members will push through price rises to cover the cost of higher wages primarily.
Only 3% intend to lower prices, the BCC added, while 51% expect there to be no change.
Respondents said staffing costs represented the main pressure, highlighting the near 10% increase in the minimum wage that came into force on April 1.
"The recent rise in the national living wage is good news for millions of employees," Shevaun Haviland, the BCC's director general, said. "But it comes at a time when labour costs pressures for business are already very high."
David Bharier, head of research at the BCC, said shipping disruption, global conflict and more post-Brexit checks on imports that will be introduced later this month will also have an impact.
Based on a survey of 4,000 companies, more than half (56%) also expected turnover to rise this year, a figure unchanged from three months ago.