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BT said it would be hit by a cost increase of around £100m after the UK budget, while the telecoms group also cut its revenue forecast.

Chief executive Allison Kirkby, who is trying to make savings as part of the recovery efforts, said the increase of almost £100 million in the next financial year was mainly linked to the reduction in the threshold and the increase in the rate of employer national insurance contributions announced by the Chancellor. Rachel Reeves last week.

She described it as “just another inflationary pressure that we have to endure in our business”, adding that the FTSE 100 company intended to offset all of this with “multiple levers”, including accelerating its plans to cost transformation, pursuing new measures of labor productivity and looking at the prices of its products and services.

Kirkby told the Financial Times that it estimated the changes to NI accounted for around 70 to 75 per cent of the total cost increase, with the remainder coming from the minimum wage increase.

NI for employers will increase by 1.2 percentage points to 15 per cent from April and the level at which employers will start paying NI for workers will increase from £9,100 to £5,000. It was also announced last week that the national living wage would rise by 6.7 per cent to £12.21 an hour from April.

His comments came as BT On Thursday, it lowered its revenue forecast for fiscal 2025 to a decline of 1 to 2 percent, down from previous forecasts of adjusted revenue growth of up to 1 percent.

It said the move primarily reflected “weaker trade outside the UK, including reduced sales of low-margin kits, as well as a softer environment in (the) corporate and public sector”.

BT shares fell 5.2 per cent to 134p in early trading.

The rest of the company’s outlook was reiterated as it also announced an interim dividend of 2.4p per share.

BT reported a 3% fall in adjusted revenue to £5.09 billion and adjusted earnings before interest, tax, depreciation and amortization of relatively flat second quarter of £2.07 billion, compared with the same period last year.

During the group’s annual results in May, Kirkby announced a further increase £3 billion savings package at the end of its 2029 financial year, after hitting a previous cost savings target of £3 billion, and BT announced it had achieved £433 million in annualized gross cost savings in the first half.