Figures from the Office for National Statistics (ONS), released yesterday (Wednesday 17th July), showed the Consumer Prices Index rose by 2% in June 2024.
It means the headline rate for inflation has remained the same at the Bank of England’s 2% target for a second consecutive month.
According to the figures, the services industry, including pubs, cafes, restaurants and hotels, was recorded to have made one of the largest upwards contributions to the rate.
Promising picture
Meanwhile prices of food and non alcoholic drink options increased by 1.5% down from 1.7% throughout May. Earlier figures also released by the ONS dictated the economy expanded by 0.4% during May, recovering from 0% growth throughout April.
Last month, UKHospitality (UKH) called for the Bank of England to reduce interest rates, which have been capped at 5.2%, after the 2% inflation target was achieved. However, the bank has stated monetary policy may need to remain “restrictive” in order to “sustainably” maintain inflation at 2% throughout the “medium term”
UKH chief, Kate Nicholls said: “The latest inflation figures paint a promising picture for the recovery of the overall UK economy, with inflation remaining at 2% in June.
"However, despite these signs of stability, it’s clear that hospitality venues are continuing to face significant cost pressures, with increased labour costs and food and drink inflation impacting price rises across the board.”
Various factors
“Further cost challenges are also on the horizon with business rates relief due to end in March 2025, which is set to threaten a number of businesses. We therefore urge the Government to take much-needed action to support the hospitality and tourism sectors and deliver its manifesto commitment to fix the broken business rate system.”
In addition, the British Beer & Pub Association (BBPA) said while stabilising inflation was "good news", underlying cost pressures were persisting across the sector.
BBPA CEO Emma McClarkin commented: "It is unclear how soon the Bank of England will be able to cut interest rates and thereby reduce one of the costs of doing business which is crucial across the beer and pub sector.
"This is one of the various factors, including high rates of tax, that the Government must consider as it looks ahead to the Budget where we need to see a cut to duty and a lowering of business rates.”
