According to the latest estimations from the Office for National Statistics (ONS), the UK economy shrank for a second consecutive month in October.
The official figures showed a 0.1% downturn in Gross Domestic Profit (GDP), attributed to concerns following the autumn Budget impacting consumer confidence.
Activity in pubs, restaurants and retail outlets had been particularly weakened, the data revealed.
UKHospitality (UKH) chief executive Kate Nicholls said: “The figures are extremely worrying and show just how fragile the UK economy remains.
Concerted slump
“The economy shrinking in October reflects a concerted slump in consumer, business and investor confidence.
“This was before the Budget, which dealt businesses yet more costs, the consequences of which are still to come.”
Data from UKH showed the increase in employer national insurance contributions (NICs) detailed in the Budget, set to come into force in April 2025, could mean a 10% rise in the cost of employment per person.
In addition, hospitality firms also face a £3.4bn hike in business rates bills from next year as relief reduces from 75% to 40%.
Nicholls added: “The changes to employer NICs, particularly the lowering of the threshold, hits hospitality disproportionately hard and has already slammed the brakes on any investment decisions, which are much-needed to drive growth.
Damaging change
“We are continuing to urge the Government to rethink its decision to go ahead with this damaging change in its current form, and instead work with industry on alternatives that mitigate the impacts on businesses, team members and economic growth.”
On top of the measures announced as part of the autumn Budget in October, the latest headline rate of inflation hit 2.3% in the 12 months to October, up from 1.7% in September, according to ONS.
Moreover, the cost of a pint of draught lager in pubs was found to have increased 2.8% in the year to October 2024, rising from £4.67 in 2023 to £4.80, official figures estimated.
