Survey by British Chambers of Commerce finds that one in two firms plan to make redundancies over the next six months.
The British Chambers of Commerce's (BCC) Monthly Survey revealed that 51% of companies are considering or are certain to make redundancies over the coming 6 months.
Another notable finding was that none of the 450 businesses surveyed plan to increase stock holdings. 83% said that they would maintain stock at their current levels, while 17% will decrease stock in the next 3 months.
One in five businesses also said that they see growth returning to the UK economy by the end of this year, while one in two are more certain that growth will not return until the first half of 2010.
BCC director of policy Adam Marshall 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."
He added: "It will be businesses 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."