Rises to National Insurance Contributions (NICs) by employers as well as an increase in the National Minimum Wage, announced in October’s Budget, will come into force in April.

According to the CIPD survey, just over a third of the 2,000 firms it spoke to said they planned to reduce their headcount through redundancies or by recruiting fewer workers.

More companies, some 42%, said they would lift prices, while a quarter of those surveyed said “they are cancelling or scaling down plans for investing in or expanding their business”.

The findings come ahead of the latest official employment figures which are due to be published on Tuesday.

Peter Cheese, chief executive of the CIPD, said these were the “most significant downward changes in employer sentiment we’ve seen in the last 10 years, outside of the pandemic”.

“It’s the everyday economy sectors, such as retail and hospitality, which employ large numbers of people, that will be particularly affected by impending increases to employment costs.”