Rachel Reeves has been under fire for measures in her Budget (Image: Getty)
New research has suggested that concerns over payment defaults remain a "critical risk" for six in 10 of 1,417 UK businesses surveyed as a backlash against Rachel Reeves' policies continues.
The study also concluded that just under a third of respondents "don’t see any areas of growth and innovation for their business".
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It comes after the Chancellor announced on October 30 that the rate at which employers pay National Insurance (NI) contributions (NICs) will rise from 13.8% to 15% on a worker's earnings above £175 from April.
The point at which businesses start paying the levy, a major source of funding for the NHS that also builds up entitlement to social security benefits, on each of their employee’s salary will be reduced from £9,100 per year to £5,000.
Further, there is set to be a 6.7% increase to the National Living Wage, which will be worth £1,400 a year for an eligible full-time worker.
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Parts of the research make for worrying reading (Image: Getty)
But credit insurer Atradius says 30% of businesses that took part in its research are "not identifying clear areas for growth or innovation, with economic uncertainty, lack of investment capital, and industry-specific challenges cited as barriers".
The firm also detailed that, in response to rising costs, over half of the businesses that cannot absorb the Budget changes (57%) intend to increase prices.
Meanwhile, 36% plan to "absorb the costs at the expense of profitability".
Experts added that "concerns around payment defaults also remain significant", as 63% of the businesses are worried about the impact of late or failed payments. This rises to 74% as regards medium-sized companies.
The biggest post-Budget concerns, Atradius said, include increased inflation (46%) and rises in NICs (37%).
Although, the results also point to an "improving picture" for companies, with 65% "confident they can overcome additional costs associated with the Budget changes".
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Ms Reeves says she wants to spark growth (Image: Getty)
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In addition, 76% of the firms "will make hiring decisions driven by opportunities for growth" this year, findings suggest, compared to 30% of firms that are "making decisions based on increased costs from the Labour Budget".
James Burgess, Head of Commercial and insolvency expert at Atradius UK, said: “With the financial outlook of the UK remaining turbulent, it’s understandable that businesses feel anxious about the changes that lie in the year ahead.
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'Talk is cheap!' Rachel Reeves slammed for nosediving economy as leaders set her D-Day
92 Comments
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Workers warned weeks left until 1 route to maximum state pension is cut down
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"However, it’s important for businesses to remain proactive. By consistently analysing market trends, focusing on customer retention, and investing in R&D to innovate products, businesses can better adapt to changing market conditions.”
Mr Burgess also mentioned the importance of employment. He added: “Strategic hiring is another vital component in equipping businesses to weather the storm.
"By continuously assessing the financial landscape, businesses can better protect themselves while also developing a skilled workforce. Additionally, the role of trade credit insurance cannot be overstated - it serves as a safety net that not only secures revenue streams but also enables sustainable expansion.”