Yesterday’s (February 6) announcement from the Bank of England regarding an interest rate cut is undoubtedly welcome news for the beleaguered hospitality and licensed on-trade sector.
But let’s be honest—while a step in the right direction, it’s unlikely to offset the tidal wave of cost increases set to hit in April, ALL of which are simply unsustainable.
For weeks, I have likened Chancellor Rachel Reeves to King Canute, hopelessly trying to turn back an economic tide with entirely the wrong approach. And I stand by that assessment.
While I do not claim to be an economic guru, like many of our readers, I have “walked the walk.”
Having managed hospitality businesses for leading operations in hotels and pubs, run my own bar/restaurant for eight years, and operated this company for 25 years, I am, not just talking “academically qualified”, I am more importantly as they say, “qualified by experience.”
That is more than can be said for many of our so-called “front benchers” in government.
In my opinion, the Bank of England has moved to position itself ahead of the coming storm.
They know what’s on the horizon and have pre-emptively laid down their excuses.
If the planned April increases go ahead—hikes in National Insurance Contributions (ENIC), business rates, and wage costs—the economy could be driven into recession.
The BoE’s move suggests they are preparing for the inevitable downturn. I have seen this play out before, and I am seeing it again now.
While the interest rate cut is a positive development, it risks being completely overshadowed by rising operational costs and a predicted resurgence in food inflation—an area that only two years ago reached staggering levels.
Our sector needs real leadership between now and April 1st. Ms. Reeves must acknowledge that these planned increases are too much, too soon.
A show of humility is needed. The government should listen to industry concerns and at the very least delay some of these hikes—ENIC and business rates being the most critical.
While a delay in wage increases would likely provoke a backlash, targeted relief elsewhere could make a real difference.
On a lighter note, it’s great to see the Six Nations driving footfall to pubs. Last Friday at The Hop in Bournemouth, the atmosphere was electric—proof that when given the opportunity, our sector can thrive.
And as for me? I’m hoping Liverpool FC make the Champions League final in Munich. Now that would give summer trade in pubs a much-needed boost!
For now, we brace for April. But if common sense prevails, perhaps the tide can be turned before it’s too late.