UK inflation fell to 10.7% in the year to November, from 11.1% in October, largely due to petrol prices falling from record highs.
However, the drop was offset by price rises for alcohol in restaurants, cafes and pubs.
According to the latest figures from the Office for National Statistics, in November, petrol and diesel prices stood at 163.6p and 187.9p per litre respectively, compared with 145.8p and 149.6p per litre in November 2021.
Meanwhile food prices continued to rise, with annual food inflation hitting 16.5% – the highest rate for 45 years – up from 16.4% in October.
British Chambers of Commerce Head of Research, David Bharier, said: “Today’s inflation rate of 10.7% may indicate we have passed the peak, but prices are now at a much higher level which will be felt for months to come.
“Our research shows that inflation remains by far and away the number one concern for businesses. Even if the rate of increase starts to slow, the damage to business confidence has been significant.
“With their margins left razor-thin, very few SMEs are planning to increase investment as they deal with a wall of higher energy bills, input costs, interest rates and taxation.
“Over half of SMEs tell us they will struggle to pay their electricity and gas bills after April. They will be nervously awaiting the Government’s expected announcement on the future shape and extent of any energy costs support, which will also impact inflation.
“Firms also need to see concrete action on infrastructure, skills, trade, and green tech to create the right environment to invest.”
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