The Bank of England (BoE) has today (Thursday 19 September) announced interest rates would be held at 5% in a bid to meet the 2% inflation target.
At its meeting ending on Wednesday 18 September 2024, the Monetary Policy Committee (MPC) voted by a majority of 8–1 to maintain rate at 5%. One member preferred to reduce the number by 0.25 percentage points.
The Bank said the decision was “guided by the need to squeeze persistent inflationary pressures”.
It follows figures from the Office for National Statistics (ONS), released earlier this week, showing the headline rate of inflation had risen by 2.2% in the year to August 2024, which was the same as July’s numbers.
Targeted support
Night-Time Industries Association (NTIA) CEO Michael Kill said: “We had hoped the bank would be confident enough to lower interest rates, but their decision to hold at 5%, coupled with inflation remaining stagnant, is another blow for night-time economy businesses.”
Kill added while inflation had steadied, businesses wouldn’t feel the benefit for months.
“This, along with the barrage of policy changes—ranging from employment rights to Martyn’s Law—and constantly shifting operating conditions, leaves our sector struggling to build a foundation to recover from.
"With the Autumn budget approaching, the Government must provide targeted support for SMEs and cultural businesses, including extending business rates relief and cutting VAT.
“The Chancellor must act now to protect businesses, jobs, and communities before it’s too late”, he continued.
Cost burden
In addition, UKHospitality (UKH) chief executive Kate Nicholls further warned hospitality firms continue to “struggle” against rising costs, particularly across food, drink, energy and wages.
Nicholls continued: “The sector’s acute cost burden needs to urgently come down, if hospitality is to fulfil its ambition to deliver investment and growth into the economy.
“That can start at the Budget, if the Chancellor introduces a lower, permanent and universal business rates multiplier for hospitality.
"Doing so would avoid the quadrupling of business rates bills when reliefs end in April, likely forcing businesses to raise prices to meet that rise, in turn threatening an inflationary spike.”
