Businesses are still struggling despite a recent interest rate cut.

This is according to Mark Barrie, head of debt advisory at Beaconsfield accountancy and advisory firm Azets, following the Bank of England reducing the base rate from five per cent to 4.75 per cent.

Mr Barrie said: "Businesses don't feel like dancing.

"The 0.25 per cent reduction to 4.75 per cent will be welcomed by a lot of businesses, many of whom are having to borrow money to either keep afloat or expand.

"But they know the cut is unlikely to bring any meaningful financial relief because of new cost pressures coming down the track.

"Companies are already concerned about the bottom-line impact of the increase in employers NICs from next April, from the current 13.8 per cent to 15 per cent, along with the additional hit caused by the drop in the earnings threshold at which employers start paying NICs – from £9,100 to £5,000."

Mr Barrie also highlighted the "impending rises in the National Living Wage for those aged 21 and over and the National Minimum Wage, for those under 21", which he said would add to higher fixed costs for companies.

He said: "We are already seeing this play out with calls from concerned business owners and directors, with a post-Budget surge in requests for loans to get through the next year or so as the cash squeeze continues.

"You have to remember that many companies, such as those in the retail, hospitality, and construction sectors, have been reeling in the aftermath of record inflation, which reached a 41-year high of 11.1 per cent just two years ago before getting back into its box at the current 1.7 per cent.

"There has been a drop in discretionary spend as households tightened their belts and this understandable parsimony is likely to continue just when businesses need consumers to spend more."

He added: “Interestingly, the last time the UK had an official base rate of 4.75% was 18 years ago in August 2006, when a number one UK chart hit was I Don’t Feel Like Dancin’ by the Scissor Sisters – and that title aptly reflects the mood of many businesses right now."