Half of firms are considering cutting or are certain to cut jobs in the next six months, revealing the continued threat to the labour market, a report showed.
The British Chambers of Commerce said the findings of a study of 450 companies showed that the Government had to continue taking measures to stimulate economic growth and boost jobs.
One in 10 firms polled said they were certain to make staff redundant in the coming months and a further 41% replied that they were considering reducing their workforce.
One in two of those questioned did not believe the UK would see a return to economic growth until the first half of 2010.
Adam Marshall, director of policy at the BCC, said: "With half of firms still thinking about cutting their workforce by the end of the year, the government must continue to promote measures that stimulate growth in investment and jobs.
"It will be business that drives an economic recovery, boosting employment along the way. Policies to help businesses retain jobs, and increase employment will be critical over the next 12 months. Scrapping plans to raise National Insurance contributions in 2011 is an obvious place to start."
