Prices are set to be increased by 52% of businesses during the first three months of 2026, according to new research by the British Chambers of Commerce which shows that confidence among firms has continued to decline.
In a survey of 4,600 businesses conducted before and after the November 2025 Budget, 46% expected an increase in
Another 30% predicated no change, and 24% a fall in turnover.
Retail and hospitality are the sectors suffering the most, with only 33% of hospitality firms expecting increased turnover in the next year, and 38% forecasting a decrease. For retailers, the figures were 36% of 33%.
Tax was the biggest concern for businesses, cited by 63% of firms, up from 59% in the third quarter of 2023.
The worries around taxation were heightened prior to the Budget on 26 November when 68% of said it was a concern. After the speech, it fell to 61%. Worries about inflation remain high, cited by 56% of businesses.
With 42% reporting no change in domestic sales and 28% seeing a decrease, 52% said they expect to raise their prices in the first three months of this year.
Labour costs are the main cost pressure for firms, cited by 72% of respondents. It is most significant in the hospitality (82%) and manufacturing (80%) sectors.
Examples of comments by businesses included a micro transport firm in Hampshire who said: “The impact of employer national insurance and doubling of business rates continues to hit hard. Food inflation continues to hit our cost base, as does an increase in electricity prices.”
A micro professional services firm in Cambridgeshire said: “Government induced uncertainty over the Budget has worsened the sense of indecision and low confidence in the market”
A medium professional services in Liverpool said: “Now that we have visibility on the current position, we can at least move forward, but confidence remains subdued.”
Commenting on the survey, David Bharier, head of research at the British Chambers of Commerce, said:
“Our data shows more clouds have gathered over business confidence, and the outlook for SMEs in 2026 is unsettled.
“Firms tell us they are worried about tax, struggling to invest and fear they’ll have to put their prices up in the months ahead. Firms’ confidence in their turnover growth has been stuck stubbornly
“After a long period of uncertainty and speculation heading into the Budget, concerns about major new tax rises eased somewhat in the aftermath. However, a
“It is now critical that 2026 is a year of delivery. The government needs to turn last year’s strategies into action; boost investment, significantly expand trade, and ease the myriad burdens facing businesses. Only then will the economic outlook shift from its current low-growth trajectory.”