Raising prices risks stoking inflation at a time when many people are struggling with the cost of living.

While the rate of inflation – which measures the pace of prices rises – has fallen sharply from record highs in 2022, it rose in both October and November.

The BCC’s survey, external, which was conducted after the Budget, found that more than half – 55% – of firms expected to raise their prices in the next three months, up from the previous reading of 39%.

Shevaun Haviland, the BCC’s director general, told the BBC that in the face of higher costs “there’s only so many things you can do”.

“You’ve got to think about putting up prices… or you’ve got to take that hit in your margin, which means you have less money to invest in the future, or you’ve got to look at your recruitment and staff costs. So it’s really, really tough.”

A closely-watched survey of the services sector by S&P Global, external suggested that in December the sector had cut jobs at the fastest pace for nearly four years.

“Faced with subdued demand conditions and hikes to employment costs, many service providers opted to curtail their staff hiring and delay backfilling roles,” said Tim Moore, economics director at S&P Global Market Intelligence

“Nearly one-in-four survey respondents saw an overall decline in their payroll numbers.”