The UK economy experienced a slight return to growth in November, marking the first increase in three months. However, the 0.1% rise fell short of expectations, highlighting ongoing economic challenges.
According to November GDP estimates released by the Office for National Statistics today, food and beverage was the highest performing sector of the economy in November. Accommodation activity was the third highest performing consumer service
Restaurants, and construction projects provided a welcome boost, offsetting the declines seen in October and September. Food and beverage had the strongest November in the whole economy, demonstrating the growth potential of hospitality.
This growth comes against a backdrop of financial instability, which has seen UK borrowing costs climb to their highest levels in years. The value of the pound has also been under pressure, further complicating the economic outlook.
With tax increases scheduled to take effect in April, there are growing fears that the UK could face prolonged stagnation. Analysts warn that sluggish growth, combined with rising costs, may continue to weigh heavily on businesses and households.
UKHospitality is urging the Government to harness the economic growth potential of hospitality, but warns that the £3.4 billion hitting the sector in April threatens businesses’ ability to invest and grow.
Kate Nicholls, Chief Executive of UKHospitality, said: “Hospitality has been the engine behind economic growth in November. This clearly demonstrates the potential the sector has to help drive recovery and prosperity nationwide.
“It’s a timely reminder to the Government about why they should be looking to invest in and back hospitality businesses to help them deliver its growth agenda.
“Unfortunately, the £3.4 billion in costs levelled on the sector in April will have the opposite effect. It is already forcing businesses to abandon investment plans, freeze recruitment, cut hours and increase prices.
“We are urging the Chancellor to think again and to delay the changes to employer National Insurance Contributions. A pause will allow proper consultation with businesses and, crucially, enable businesses to continue on a path to growth.”
The hospitality industry, a key contributor to this recent growth, remains a focal point in the recovery process. While the sector has demonstrated resilience, its future performance will be critical in driving broader economic recovery.