The CBI had wanted a freeze to give the economy a boost.
Its Director of Business Environment policy Dr Neil Bentley said: “This unnecessary jump in business rates will affect nearly every firm, and struggling retailers will be particularly hard hit, at a time when they need all the help we can give them.
“Pegging the increase to September’s record RPI rate - an 18-year high - enables government to raise£400m in extra tax revenues from firms when they can least afford it.
“Councils will now have carte blanche to raise£1.15bn extra in business tax next year.
“This threat to jobs, investment and the survival of viable businesses can still be avoided if the government lives up to its promise of ‘doing everything it can’ by freezing next year’s rates.”
The CBI has called for a freeze on business rate liabilities to help employs through the current economic downturn as part of a 10-point plan issued at the time of the Pre-Budget Report.