Inflation sees biggest increase in over 40-years

16-Nov-2022 - Last updated on 16-Nov-2022 at 11:00 GMT

Additional pressure: inflation hits highest level for more than 40-years with food prices making one of the biggest upwards contributions (Credit: Getty/ Ibrahim Akcengiz)

Record setting inflation figures will “undoubtedly cause anxiety” for businesses as keeping costs under control becomes “ever-more challenging”, according to leaders from across the sector.

This comes as the Office for National Statistics (ONS) today (Wednesday 16 November) revealed the Consumer Prices Index (CPI) had increased to 11.1% in the 12 months to October 2022, up from 10.1% in September 2022, rising by 2% on a monthly basis and the biggest increase for more than 40-years.

Additionally, according to the ONS rising food prices made one of the largest upward contributions to increasing inflation rates during this period.

UKHospitality (UKH) chief executive Kate Nicholls said: “Today’s record-setting inflation figures confirms the crisis is worsening.

“For the best part of a year, businesses have been doing their best to keep prices for customers under control but this is ever-more challenging as energy bills and supply costs continue to soar.

Additional pressure

“As inflation continues to rise, the squeeze on consumers’ discretionary spend will tighten even further and put additional pressure on the hospitality sector.

“It’s essential the Government introduces measures that can keep hospitality businesses afloat.

“Extending business rates relief and not introducing an inflation-linked hike to rates should be a central part of that.”

The data from the ONS showed food and non-alcoholic beverages prices rose by 16.4% in the 12 months to October 2022, up from 14.6% in September this year, with the biggest upward effect attributed to milk, cheese and eggs,

Having risen continuously for the past 15-months, food and non-alcoholic prices are now estimated to be the highest since September 1977, when the annual inflation rate for the category stood at 17.6%.

Though the largest contribution to increased inflation came from soaring gas and electricity prices, which rose by 128.9% and 65.7% respectively in the 12 months to October 2022, a monthly increase of 36.9% and 16.9%, leading to a 2.59 percentage point contribution to the annual inflation rate from electricity, gas, and other fuels in total.

Difficult decisions

Moreover, the average cost of a pint of lager increased by 2p between September and October 2022, rising from £4.13 to £4.15.

This comes as earlier this week the British Beer & Pub Association (BBPA) claimed a pint in a pub was becoming an “unaffordable luxury” amid soaring costs

BBPA chief executive Emma McClarkin said: “Our pubs and brewers continue to be squeezed at both ends, with business costs already up 22% on last year and difficult decisions being made on cutting opening times, increasing prices or in some cases closing altogether.

“These new figures will undoubtedly cause anxiety for many businesses at an already critically difficult time, as customers understandably become even more cautious, and costs continue to spiral out of control.

“We urgently need the Chancellor to provide some relief to our pubs and brewers in tomorrow’s (Thursday 17 November) statement as we are heading into an extremely bleak winter and are set to lose even more pubs and brewers in communities across the country.”