Over half of UK companies plan to raise prices by Easter, a new business confidence survey from lobby group the CBI has found.
A survey of more than 4,800 firms indicated 55% of them expect prices to increase in the next three months compared to 39% in a similar poll in the second half of 2024.
Confidence among the respondents had also slumped following the tax hikes announced in the Budget by the new government.
Just below 50% of firms questioned said they expect turnover to grow in their next financial year, down from 56% last year.
Shevaun Haviland, the CBI’s director-general called the situation “a pressure cooker of rising costs and taxes”.
“Firms of all shapes and sizes are telling us the national insurance hike is particularly damaging,” she said.
“Businesses are already cutting back on investment and say they will have to put up prices in the coming months.”
In October, Labour announced a rise in employer’s national insurance contributions (NICs) alongside an increase in the minimum wage.
Recent data from the ONS showed that the UK economy saw zero growth between July and September and contracted during October.