On Friday 22 November energy regulator OFGEM announced the energy price cap would be increased by 1.2% from January to March 2025.
Night-Time Industries Association (NTIA) CEO Michael Kill said the increase from OFGEM “compounded” the already “severe pressures” faced by the night-time economy.
He added: “While households will see a modest £21 annual increase, businesses in our sector continue to bear the brunt of skyrocketing energy costs.
“This, coupled with a looming rise in taxation this April, is pushing many businesses toward a financial cliff edge.
“The combined impact is forcing operators to make painful decisions, such as reducing operating hours or cutting staff, directly impacting workers who are already struggling with the rising cost of living.”
Double-edged sword
Kill described this as a “double-edged sword” for both workers and employers across the industry.
He continued: “As consumers’ disposable income shrinks due to costs, demand for night-time services drops, placing immense strain on businesses already teetering on the brink.
“At the same time, the workforce faces fewer shifts and job insecurity as businesses scale back operations to cope with these mounting costs.
“The most frustrating part of this crisis is the stark contrast between the energy companies that are prospering from rising prices and the communities and night-time businesses that are suffering under the strain.
“While energy companies continue to see record profits, the businesses that form the backbone of our local economies, and the workers who depend on them, are left to struggle with crippling overheads.
“Without urgent support and relief, the impact on jobs, businesses, and the wider economy will be devastating, leaving communities without the vibrant night-time culture that is vital to their identity and economy.”
Broken system
This comes as 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.
According to ONS, the rate was the highest for six months and energy prices had 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.
A spokesperson for the British Beer & Pub Association (BBAP) Added: “We know many look to their local pub as a place of warmth and comfort. However, our industry is also facing soaring energy costs.
“We remain deeply concerned that OFGEM’s non-domestic review appears to have had a limited impact on our sector.
“Ongoing lack of competition caused by suppliers unwilling to service our sector is inflating already-high prices.
“In our view, the non-domestic market remains broken and more needs to be done to fix this system.
“Only with action from the Government and OFGEM will we be able to keep giving our communities a place of warmth, comfort, and be a home from home.”