Most firms are increasing their prices in response to rising costs, threatening a “cost-of-doing-business crisis”, according to a report.
A survey of 1,000 businesses found that almost three out of four are raising prices, while half are cutting costs and almost one in five are scaling down investment.
One in 20 respondents to the British Chambers of Commerce poll said they are considering ceasing to trade.
The BCC called on the Government to tackle the challenges facing firms.
Director-general Shevaun Haviland has written to Chancellor Rishi Sunak, warning of the dangers facing firms.
She said: “Without help from the Treasury to weather this storm, many businesses, especially smaller ones, will be faced with a nearly impossible situation that will leave them with little choice but to raise prices.
“Our research has shown that businesses were drowning in rising costs even before the energy crisis began to bite.
“This latest data reveals that companies are now also under extreme pressure from spiralling gas and electricity bills as well as increased wages.
“The majority are having to raise prices in response, though many are also being forced to scale back planned investment or cut other costs from their balance sheet.
“Unabated, the surging cost pressures produced by the cost-of-doing-business crisis will continue to lead to increased prices and fuel the cost-of-living crisis currently being faced by people across the country.”
Jonathan Reynolds, Shadow Business Secretary, said: “The Conservatives’ cost of living crisis is hammering businesses, shops and factories pushing up prices for consumers and placing Great British firms at risk.
“The Government must listen to firms and workers and stop the national insurance rise which is a tax on jobs for businesses already struggling with higher costs.
“Labour would deal with the cost-of-living crisis for consumers and businesses – bringing down energy bills, introducing a £600 million contingency fund for businesses struggling with energy costs paid for through a one-off windfall tax on oil and gas producers.”
