Fewer firms increased their headcount in the final quarter of last year, a new survey showed, as businesses prepare for the impact of the national insurance hike.

According to a report from the British Chamber of Commerce (BCC), less than a quarter (24 per cent) of firms increased staffing numbers in the three months to December, down from 27 per cent in the third quarter of 2024.

Meanwhile, 16 per cent of respondents said they had cut back on staff and 60 per cent said their workforce had remained constant.

The survey, which garnered over 4,800 responses, was carried out between 11 November and 9 December as firms dealt with the fallout from the Budget.

Chancellor Rachel Reeves hiked employers’ national insurance and also lifted the minimum wage by 6.7 per cent in the fiscal event, adding significant extra costs onto businesses.

Firms were increasingly worried by higher labour costs, the survey showed, with 75 per cent of firms suggesting it was the main pressure to raise prices. That was up from 66 per cent in the quarter before.

Jane Gratton, deputy director of public policy at the BCC, warned that the “concerning results” from the survey are likely to represent “just the tip of the iceberg”.