Corin Crane, chief executive of the Coventry and Warwickshire Chamber of Commerce, said it backed up what he has been hearing from firms across the city and county.

He said: “We hold our Local Business Forums in every corner of Coventry and Warwickshire and we also speak to our members on a daily basis.

“Time and again, I hear that the cost of doing business has risen – especially when it comes to employment – and that it is putting the squeeze on companies.

“A rise in NI and the national living wage, as well as a shroud of global uncertainty, has made it difficult for firms and we can see evidence of that in these latest figures.

“The Government must use every lever in its power to provide stability and, crucially, confidence for businesses to grow.”

Jane Gratton, Deputy Director Public Policy at the British Chambers of Commerce, said: “The increase in employment costs for business appears to be starting to bite with today’s data showing a rise in unemployment.

“This year’s steep increases in national insurance and the national living wage have undoubtedly delivered a shock to businesses. 

“Vacancies continue to fall which aligns with our research, showing that, due to increased employment costs, many firms are now freezing recruitment plans, while others are being forced to reduce headcount. 

“At the same time, wage growth continues to outpace inflation, adding further cost pressures for firms already facing rising overheads. Employment costs and pervasive skills shortages are a massive challenge for business, presenting big risks to investment and growth. 

“This week’s Comprehensive Spending Review is a golden opportunity to invest more in the skills system – with apprenticeship reform and local skills improvement plans critical to solving the problem.

“The £5bn cost associated with the employment rights bill poses a further threat to firms’ investment plans. Without further amendment, the legislation will add even more to employers’ costs.”