This comes as energy regulator OFGEM chief executive Jonathan Brearley announced yesterday (Tuesday 24 May) the energy price cap, which limits how much providers can raise prices, is expected to increase by more than £800 in October due to volatile gas prices influenced by Russia’s invasion of Ukraine.
Licensee of the Unruly Pig, Bromeswell, Suffolk, Brendan Padfield said: “This will adversely affect pubs, this issue is really all about reduced disposable income.
“Less spending power means less nights out or down the pub. Inflation is already at its highest in 40 years, yet according to the Bank of England, apocalyptic food inflation beckons.
“Add on to that yet further whopper energy price increases in October and you have the perfect storm.
Roller-coaster journey
“The sad truth is we are already seeing a reduction in discretionary spend but the probability is there is worse to come with the pending energy cap change.
“Hold on to your hats because come October, hospitality faces a roller-coaster journey at best.”
Speaking to MPs at the Business Select Committee, Brearley stated the energy regulator was only part way through its price reviews ahead of the next cap in October, but conditions in the global gas market had worsened and prices had recently, at times, been more than 10 times the normal level.
Brearley told the committee he knew this was a distressing time for consumers, but the cap on domestic energy contracts was anticipated to increase from £1,971 to around £2,800 in what he described as a "once in a generation event not seen since the oil crisis in the 1970s".
Frisco Group managing director Heath Ball said: “The energy price cap rise in October is just more bad news for the trade.
Trade is suffering
“Whilst it is said to only impact domestic customers, there will, of course, be more pressure on their discretionary spending, so once again we'll be under more pressure.
“With all the price rises the trade is suffering, coupled with the press on consumer spending, it's difficult to find much to feel positive about.
“There’s a feeling of resignation among the so-called ‘influencers’ in our industry, who seem to be telling us about the issues we face, but not giving us any hope, they can influence them to help the industry.
“We all need to remember in terms of these price rises, what goes up doesn’t come down as quickly.
“It’ll be years and not months before this levels-out and we are back to some ‘normality’, the Government is turning a deaf ear to the industry. We're on our own and better get used to that if we are to survive.”
