Businesses are expecting a “significant fall” in trading over the next few months that could put more jobs at risk and further undermine the government’s growth plans.

The CBI said there was “widespread” pessimism across the private sector as its latest growth indicator survey found that a net 22% of private sector companies expect their output to decline between now and April – ahead of the Budget tax hikes.

Conditions are broadly unchanged from December, which was the weakest month in more than two years.

Alarmingly, businesses in the consumer services sector are as pessimistic about their outlook since just before the disastrous “mini budget” in 2022.

Alpesh Paleja, interim deputy chief economist at the CBI said:  “After a grim lead-up to Christmas, the New Year hasn’t brought any sense of renewal, with businesses still expecting a significant fall in activity.

“Alongside plans to cut staff and raise prices further, this risks an increasingly awkward trade-off for policymakers.

“Anecdotes suggest that companies are being hit by lacklustre demand and caution among consumers, while also continuing to adjust to measures announced in the Budget.”