The Consumer Prices Index (CPI) rose by 2.5% in the 12 months to December 2024, down from 2.6% in November, according to the latest data from the Office for National Statistics (ONS).
Restaurants and hotels made the largest downward contribution to the monthly change in inflation.
Troubling period
UKHospitality (UKH) chief executive Kate Nicholls said: “While it’s positive there has been a slight dip in inflation, there has not been enough movement to calm the fears among hospitality businesses that we’re entering a troubling period for the economy.
“This will only get worse as we head towards April, when £3.4bn of costs will be levelled on the hospitality sector. These damaging costs are forcing businesses to slash investment, cut jobs and raise prices – none of which will drive economic growth or help reduce inflation.”
The official figures also showed prices for food and non-alcoholic beverages rose by 2% in the year to December, which was unchanged from November 2024. Fruit, sugar, jam, honey, syrups, chocolate and confectionery were found to have made the largest upwards contributions.
Nicholls added: “We desperately need to grow away from stagflation, and that starts with rethinking the planned changes to employer National Insurance Contributions.
Breathing space
“A pause will mitigate the negative impacts on businesses, team members and the economy that these changes will bring, and it will give the sector some breathing space to work back towards investment and growth.”
The update followed the Bank of England’s decision last month to hold interest rates at 4.75% for a second consecutive time in a bid to meet its 2% inflation target, adding pressure to businesses battling Covid loan repayments.
A spokesperson for the British Beer & Pub Association (BBPA) said: “Today’s inflation update shows the rate remaining above the Bank of England target, illustrating the pressures that remain across the economy, including for the beer and pub sector.
“Coming ahead of the April cliff edge when the tax and cost hikes announced at last October’s budget take effect, brewers and pubs are calling on the Government to look again at the drivers affecting the high cost-of-doing business and bring forward the detailed proposals and reforms that will reduce business rates.”
