The UK economy ended last year stuck in a "weak holding pattern", with uncertainty over Brexit hitting sales and recruitment, according to a new report.
Problems hiring staff are at near-record highs, a survey of 6,000 firms suggested.
Four out of five manufacturers are struggling to recruit suitably skilled workers, with almost as many services companies having similar problems, the BCC said.
The percentage of manufacturers expecting to raise prices is at its highest level in a year, said the report.
Dr Adam Marshall, director general of the BCC, said: "Throughout much of 2018, UK businesses were subjected to a barrage of political noise and drama, so it's no surprise to see firms report muted domestic demand and investment.
"In this new year, the government must demonstrate that it is ready to act to turbo-charge business confidence.
"With little clarity on the trading conditions they'll face in just two months' time, companies are understandably holding back on spending and making big decisions about their futures.
"The government's absolute priority now must be to provide clarity on conditions in the near-term and avoid a messy and disorderly Brexit. Business communities won't forgive politicians who allow this to happen, by default or otherwise.
"Given the magnitude of the recruitment difficulties faced by firms clear across the UK, business concerns about the government's recent blueprint for future immigration rules must be taken seriously and companies must be able to access skills at all levels without heavy costs or bureaucracy."
Suren Thiru, the BCC's head of economics added: "Our latest survey suggests that UK economic conditions were worryingly subdued in the final quarter of 2018, with a number of key indicators continuing to weaken under the weight of persistent Brexit uncertainty and rising cost pressures."
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