More than half of UK businesses are preparing to raise prices in the next three months as they grapple with increasing costs and taxes, according to a survey by the British Chambers of Commerce (BCC). The survey of nearly 5,000 firms found business confidence at its lowest in two years, with 63% expressing concern over tax rises, including a planned increase in National Insurance contributions (NICs) from April.
The BCC’s data revealed that 55% of firms expect to increase prices soon, up from 39% in the previous survey. Shevaun Haviland, BCC director general, warned that businesses face tough choices: passing on costs to customers, reducing profit margins, or cutting recruitment and staff expenses. Rising prices risk exacerbating inflation, which, although lower than 2022’s peaks, has ticked up in recent months.
The Chancellor’s autumn Budget raised employer NICs from 13.8% to 15% and increased the National Living Wage to £12.21 an hour, adding pressure on businesses. Manufacturers like Denroy Group said these changes would significantly increase costs, potentially leading to price hikes, reduced headcounts, or delayed growth investments. Confidence in sales growth has also fallen, with fewer than half of businesses expecting an increase in the coming year.
While some sectors, like travel, report resilience, others warn the measures could hinder investment. The Treasury defended the Budget, stating it delivers stability and growth opportunities while ensuring many employers face no change or a reduction in their NICs. However, the BCC labelled the environment as a “pressure cooker” of rising costs and taxes.
