Over two-thirds of businesses expect to increase prices during the next three months, to offset record-high energy and raw material costs.

Corporate confidence in the economy has fallen to a 15-month low, while consumer confidence is at its lowest level for 48 years, according to the GfK consumer confidence index.

Businesses are not protected by the energy price cap (https://www.digitalenergyrevolution.co.uk/the-government-must-cap-energy-prices-for-small-businesses-now/) and are extremely vulnerable to price surges.

Various lobby groups are pressurising the government to take action to help businesses through this period of extreme volatility.

The chamber of commerce’s Shevaun Haviland is pushing for a reduction in VAT on business energy bills, down to 5% from the current rate of 20%. While the Institute of Directors argued that the temporary investment tax incentive known as the “super-deduction” should be made permanent.

The Institute of Director’s chief economist Kitty Ussher said, “When business confidence in the macroeconomy is low, as it is at the moment, the case for government incentives to raise investment becomes even stronger.”

Digital Energy Revolution’s Callum Pengelly added “We have seen 300% increases in energy costs for businesses, they are being absolutely hammered. The government needs to step in with a short-term solution for these spiraling costs and start working on the bigger picture, which is energy security for the next decade”

A government spokesman said that businesses had received £400 billion of support over the past few years.