The UK economy is “stuck in a rut” amid continued uncertainty over Brexit, with some firms giving up trying to hire staff, a leading business group has warned.
The British Chambers of Commerce (BCC) said growth was “flatlining” and business confidence weakening.
A survey of 5,600 businesses showed manufacturing exports were slowing and many services firms were giving up trying to hire new staff.
Recruitment problems reported by service firms have hit an all-time high, the BCC said.
The study also revealed an increasing number of manufacturers expect prices to rise, mainly because of the cost of raw materials.
Uncertainty over future trading conditions is continuing to act as a brake on business investment in both the manufacturing and services sectors, the report said.
The balance of firms that looked to invest in either plant and machinery or training in recent months fell in both sectors to their lowest level in more than a year.
Dr Adam Marshall, director general of the BCC, said: “These figures reinforce what we are hearing from businesses up and down the country - the uncertainty over Brexit and the lack of bold moves to boost business at home are starting to bite.
“It should be a matter of grave concern to government that sales and orders both at home and abroad are stagnating.
“Weaker sterling is no longer proving a boon to many of our exporters, while consumer spending is failing to boost the domestic market.”
He added: “We have a vibrant and innovative business community that wants to invest and grow but we are stuck in limbo while Brexit negotiations rumble on.
“The upcoming Budget must deliver radical, decisive action to boost growth and productivity at precisely the moment that the economy needs it most.
“There has never been a more important time for the government to bolster business investment, competitiveness and productivity in the face of significant Brexit headwinds.
“While fewer companies are trying to recruit, those that are hiring they are finding it increasing challenging to fill vacancies.