Official figures from the Office of National Statistics showed a 0.1 per cent drop, despite expectations that the economy would return to growth after a decline in September.
Mark Casci, head of policy and representation at the Chamber, said: “Two months of negative growth shows that the nation’s finances are on shakier ground than we would like. Chamber research is showing business confidence is fragile owing to Government policies around tax and employment law.
“Our network has been telling us now for several weeks that investment and recruitment plans are being shrunk or put on hold in the face of increased overheads and tax is continually cited as the chief cost pressure facing businesses.
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“We will now look to the publication of the new industrial strategy as a means of kick-starting growth so that firms have the confidence to invest and innovate.”
Last week, the chamber also reported that investment decisions are increasingly under threat following the news that inflation has risen to 2.6%.
After plunging from the generational highs of late 2022, inflation has been slowly tracking upwards during the last few months and is now still ahead of the Government’s base target of 2%.
Mark Casci also said: “Despite the decline from the sky-high rates of inflation seen in the past 18 months, it remains a core external cost issue for many businesses. “Prices for both businesses and consumers are simply not coming down and this is reflected in the increase in inflation to 2.6 per cent.”
