Six out of 10 firms facing increased business rate bills are already planning cutbacks, new figures reveal.
The revaluation of business rates is due to come into force next week, and after building pressure chancellor Philip Hammond introduced some transitional protections for firms in his Budget.
However, a survey of London's firms has now laid bare the sheer number of businesses forced to find savings.
A poll commissioned of 500 firms by the London Chamber of Commerce and Industry has found that 60 per cent of businesses facing bigger bills will make cutbacks, including downsizing or relocations.
Just over one in four of the London firms planning savings expect to look at reductions to capital investment, while a fifth say they plan to look at reducing staff numbers.
And 17 per cent say that that the increases, which are likely to hit firms in London and the South East hardest, could see them move some activities outside of the capital.
LCCI chief executive Colin Stanbridge said: “There was a huge amount of worry before the Budget about the hikes in business rates in the capital. In response all that has really been done is for the government to announce just enough to show that they recognise that in many cases the rises are unfair.
“However the reality is that the scale of worry and negative planning that is happening among London business far outweighs this paltry offering.
“We still need a full scale review of the business rates system and we need it before we see numerous businesses folding or moving outside of London.”
The survey also found that larger businesses, with ten or more staff, were more likely to reduce overall staff numbers. Just over one in four big business said they would cut headcount, compared to 15 per cent of smaller firms.