At its meeting on Wednesday 19 June, the Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7–2 to maintain the rate at 5.25%. Two members voted to reduce the number by 0.25 percentage points.
UKH chief executive Kate Nicholls said: “It’s disappointing the Bank of England has chosen not to cut interest rates.
Right track
“Inflation meeting the bank’s target was the strongest signal yet that the economy is on the right track and decisive action today would have given a boost to both consumer confidence and helped reduce costs for hospitality businesses.”
In addition, the bank said while GDP growth had been “stronger than expected” during the first half of the year, monetary policy would need to remain “restrictive” for long enough to “sustainably” return inflation to the 2% target in the medium term.
"The challenge now is going for growth and we hope the bank will support that with a rate cut at its next meeting in August”, Nicholls added.
Figures from the Office for National Statistics (ONS) earlier this week showed headline rate to inflation had hit the bank’s 2% target for the first time in almost three years.
Regulatory framework
Driven by a reduction in food and soft drinks costs as well as in the recreation and culture segments, the Consumer Prices Index (CPI) saw a 2% increase in the 12-months the May, down from 2.3% in April.
Reacting to the data, British Beer & Pub Association (BBPA) chief executive Emma McClarkin said while pubs and brewers would “welcome” news the target had been achieved, energy and food and drink costs were still 25% higher than in 2022, adding the cost of doing business remains “challenging”.
She continued: “While interest rates are unlikely to be lowered tomorrow during the election period, we now look forward to these easing during the summer and latter stages of the year, and working with the next Government to help put in the place the optimal fiscal and regulatory framework that will ensure the beer and pub sector does not just survive but thrives.”
