More than half of British companies are planning price rises in the next three months, according to research that found UK business confidence has slumped to its lowest since the chaos of Liz Truss’s brief stint as prime minister.

Of 4,800 businesses polled by the British Chambers of Commerce (BCC), 55% said they expected to increase prices in the next three months, up from 39% in a similar survey in the second half of last year.

There was also a steep increase in concern about looming tax rises, after the government revealed a budget in October that relied heavily on business taxation to raise £40bn in extra revenues, including £25bn more in employer national insurance contributions.

It prompted a wave of criticism from business groups, although the chancellor, Rachel Reeves has said there is “no alternative” given the parlous inheritance from the previous Conservative administration and desire for investment in the NHS and in infrastructure.

Labour under Keir Starmer has said that it is focused on making investments to boost GDP growth, but has come under fire over a series of poor economic data suggesting no improvement in the economy’s fortunes in the six months since the party took power.

The key revenue-raising measure in the budget was the increase in employer national insurance contributions, which affects almost every business, whether profitable or not. The BCC poll found that 63% of firms cited taxation as a worry after the budget, compared with 48% three months earlier.

Shevaun Haviland, the BCC’s director general, said: “The worrying reverberations of the budget are clear to see in our survey data. Businesses confidence has slumped in a pressure cooker of rising costs and taxes.

“Firms of all shapes and sizes are telling us the national insurance hike is particularly damaging. Businesses are already cutting back on investment and say they will have to put up prices in the coming months.”

The BCC said the decline in its measure of confidence – whether businesses expect turnover to increase over the next year – was “significant”. It dropped from 56% to 49%.

Financial markets are betting that the Bank of England will be forced to cut interest rates steeply this year, although the Bank’s policymakers have also said that inflationary pressures remain in the UK economy.

The Bank last month highlighted the effect of the budget as it tempered its expectations for UK economic growth, while also flagging the prospect of uncertainty around global trade as Donald Trump prepares to start his second term as US president on 20 January. Economists are wary that promised steep tariffs on US imports could dent global growth.