Concerns around inflation are hampering the prospects of Scottish businesses, with no improvement to sales, cashflow or investment.

The latest findings from the Scottish Chambers of Commerce business survey revealed that, while confidence has generally increased, this is yet to translate into an overall improvement of business conditions, the SCC said.

The survey indicates that many small to medium-sized enterprises are still struggling in the face of rising cost pressures and high inflation, as well as continuing to face challenges regarding access to the labour market.

📝 Get full unlimited access to our unrivalled business news and analysis for only £2 for 2 months.

👉 Click here to get this offer

It found concern over inflation remains high among all firms and has seen little movement over the quarter, with around 80 per cent reporting increased concern.

Around 75% reported increased cost pressures from energy costs, 70% pointed to increased cost pressures from labour costs, including salaries, and 55% reported increased cost pressures from fuels such as diesel and petrol.

Half said that increased cost pressures from raw material prices were factors.

More firms reported a fall in cashflow than an increase, and manufacturing was the only sector to report growth for cashflow and not a contraction. The services sector was the only sector to report growth in profits.

READ MORE: Law firm promotes five to partnership in Scotland

Stephen Leckie, SCC president, said that "businesses continue to tell us of the pressure that such consistently high inflation is having on their decisions and the critical bottom line", adding: "This is evidenced in the higher number of firms that intend to raise their prices in the next quarter.

“While this figure has eased since the last quarter, it’s likely to increase unless inflationary pressures can be sufficiently cooled, as borrowing and input costs continue to be squeezed by rising interest rates.”

He also said concerns were raised over controversial government policy plans.

"These include the deposit return scheme, short-term lets, alcohol advertising, tourism visitor levy, [and] rent controls, to name but a few, and that’s why we pressed all the SNP leader candidates in their leadership contest to commit to reducing business regulation which is adding to the cost of doing business in Scotland," Mr Leckie said.

READ MORE: Business minister quits government

“We also call once again for an immediate wholesale review of the out-of-date business rates system to be actioned, alongside ensuring that Scottish firms receive rates reliefs on par with their counterparts in the rest of the UK.”

He added: “The new First Minister has welcomingly committed to introducing a small business impact assessment at the development stage of future policymaking, but we would urge that these assessments are also carried out for existing or imminent regulations.

“Businesses will be looking for action on regulation very soon and we will hold the FM’s pledge of an ‘open door’ for business to account.”