Business leaders’ confidence is at a “crossroads” just weeks ahead of the Government’s tax hikes kicking in, according to fresh research.

BCG’s Centre for Growth surveyed 1,500 bosses in its “State of UK Business” report and found 57 per think a recession is likely this year.

This follows Friday’s release from the Office for National Statistics, which showed the UK economy had shrunk 0.1 per cent in January in a fresh blow to Labour’s growth agenda.

Over 60 per cent of survey respondents said the increase in national insurance contributions (NIC) would inflate their costs, with construction, manufacturing, mining and utilities bosses most concerned. 

The changes, set to come into effect in April, will hike employers’ NIC by 1.2 per cent to 15 per cent.

A third of businesses named the Government’s tax increases as a key concern.

The report said: “Nervousness regarding the direction of the UK economy appears to be linked to growing fears around the impact of higher taxes on respondents’ businesses.”

Businesses have ‘low confidence’ in broader economy

The survey outlined leaders’ priorities for the Government, with a simplified tax system and lower tax levels topping the list at 77 per cent.