Corin Crane, chief executive of the Coventry and Warwickshire Chamber of Commerce, said there would be no kneejerk reaction from businesses across the region.

He said: “The economy has been pretty flat for some time now and we’ve come to expect a small rise one month, followed by a little dip.

“So, a small drop in GDP in January isn’t going to panic anyone – it just serves to highlight the ongoing uncertainty that firms across the patch and, indeed, the country are having to navigate on an ongoing basis.

“The Government is quite right to make growth its mission and it must use its Comprehensive Spending Review later this month to start to create stronger conditions for businesses to invest and grow.”

Stuart Morrison, Research Manager at the British Chambers of Commerce, said: “With businesses facing an impending avalanche of cost pressures, it’s unsurprising that growth is in trouble. With GDP shrinking in January and an expansion of just 0.2% for the three months prior, the economy was treading water. 

“Our latest forecast predicts a tough year ahead, with the economy growing just 0.9% in 2025, driven largely by increased government spending. The national insurance hike is looming large for businesses and will hit investment, recruitment and prices in the coming months. 

“To unlock growth, the government should publish a tax roadmap on national insurance and business rates. This would enable firms to know when cost-pressures will ease, allowing them to plan their investment decisions. 

“They also want to see movement on infrastructure development and renewed support for exports, so they can navigate the choppy waters ahead with more confidence."