Inflation peak ‘worrying news’ for pubs and brewers, says BBPA

Retail price index (RPI) and consumer price index (CPI) respectively rose to 3.5% and 2.7% in August 2018, their highest levels in six months.

Mike Hardie, head of inflation at the Office for National Statistics, stated that rising prices for recreational goods, transport and clothing had driven the increase.

"Consumers paid more for theatre shows, sea fares and new season autumn clothing last month. However, mobile phone charges, and furniture and household goods had a downward effect on inflation."

Alastair Neame, senior economist at the Centre for Economics and Business Research, added: "Inflation data shows the rate of price growth accelerated in August, and may well prove to have exceeded total earnings growth in the same period.

"Unless UK workers can increase their productivity, this trend is likely to continue - squeezing living standards over the medium term."

Clear need for action

Commenting on the rise, BBPA chief executive Brigid Simmonds said: “This significant rise in inflation is worrying news for pubs and brewers alike.

“Beer duty is linked to RPI, which rose by 3.5% in August, meaning pubs and brewers face a steep hike in taxes just like under the dreaded beer duty escalator.

“As a consequence, Britain’s brewers could see an increase of over £100 million in tax in the next Budget.

"The misery for pubs would be compounded by CPI increases in business rates.

“£1 in every £3 spent in pubs already goes to the taxman and under the beer duty escalator, which saw sustained increases to beer tax, 5,000 pubs closed and 58,000 jobs were lost.

“It’s clear that action is needed by the Government to alleviate these cost pressures pubs face, else we risk losing them forever.

“This is why we are backing the campaign longlivethelocal.pub to call on the Government to cut beer tax and support local pubs.”