The risk of higher prices remains a major concern as businesses struggle to absorb the chancellor’s £23bn tax raid due to hike in employers’ National Insurance contributions (NICs), which only came into effect in April.

Repeated warnings flagged in business surveys in the last month showed that the rise has already hit jobs, resulting in frozen pay and reduced hours for many workers, and a freeze on new hires across many companies.

Chand Chudasama, partner and corporate finance expert at Price Bailey, said: ‘Inflation, including housing costs, remains stubbornly high at 4%, with core inflation at 3.4% - placing the UK back where it stood in February 2024.

‘As accountants and business advisors, we are concerned that the full impact of the recent national insurance rise has yet to be reflected in these figures; input costs have risen, and this will compound inflationary pressures as the financial year progresses.’

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