Rising inflation and energy prices 'ominous warning'

Figures released by the Office for National Statistics (ONS) on Wednesday 20 November revealed the headline rate of inflation hit 2.3% in the 12 months to October, up from 1.7% in September.

UKHospitality (UKH) chief executive Kate Nicholls, said: “This higher-than-expected level of inflation is an ominous warning of what could come in April, when businesses across the country will be hit by significant cost increases.

“Hospitality is braced for its own £3.4bn cost increase, and that will impact jobs and push up prices, which we know will be a struggle for customers.

“The reality is businesses are unable to absorb any more cost, having taken on so much over the past four years, and it is consumers and team members that will feel the effects.

Urgent rethink 

“If the Government wants to keep a lid on inflation, protect jobs and help businesses, it must urgently rethink its changes to employer NICs.”

Nicholls urged the Government to introduce a new employer NICs band for lower earners or an “exemption” for lower band taxpayers working fewer than 20 hours a week.

According to ONS, October’s inflation rate was the highest for six months, with energy prices having made the largest upward contributions to inflation.

Electricity prices rose by 7.7% year-on-year while gas prices increased by 11.7% during the 12-month period, the data showed.

In addition, the cost of food and non-alcoholic beverages jumped 1.9% in the year to October, up from 1.8% in September, driven by the price of vegetable and dairy products.

Essential spaces 

British Institute of Innkeeping (BII) CEO Steve Alton told The Morning Advertiser (MA):​ "With higher-than-expected energy prices fuelling a rise in inflation, pubs will face further profitability challenges as they head into the quieter winter months.

"They are not afforded the same protection as consumers, with no commercial energy price caps, and have already reduced energy usage wherever possible in a bid to make their businesses financially and environmentally sustainable.

"Alongside the tax rises announced in the Budget last month, they will have to make significant changes in staffing and prices to customers to even stand still, let alone make a profit.

“For many, this is an additional blow and could lead to widespread business failure, with lost employment and tax revenue to the Treasury.

"Most importantly though, towns, villages and high streets stand to lose vital community hubs across the whole of the UK. Government must act now to ensure these unique and essential spaces are protected."