Inflation and Rising Energy Costs Squeeze Hospitality Businesses and Consumers, NTIA Warns

UK Consumer Prices Index inflation jumped to 2.9% in July up from 2.6% the previous month.

The rise was driven by a 13% increase in Ofgem’s energy price cap, placing intense cost pressures on the hospitality sector and squeezing consumer disposable income.

Gas prices soared at the sharpest pace in almost four years, the Office for National Statistics (ONS) said, as energy costs surged after US-Israel war with Iran began, which has restricted global oil supplies.

July’s reading is the highest since March but some price growth slowed. Food inflation, at 1.3%, is at its lowest rate for close to five years.

NTIA CEO Michael Kill CEO said: “Today’s (August 19) inflation figures will be deeply concerning for businesses across the night time economy, particularly when energy costs have been a significant contributor to the increase.

For hospitality and night time economy businesses, this creates pressure from both directions. Operators continue to face substantial costs across energy, employment and business rates, while rising household bills further squeeze the disposable income that drives consumer spending.

We must also recognise what sits behind the headline figure. The impact of energy costs on inflation reinforces the urgent need to create greater stability and affordability for both businesses and households.

Government has made economic growth a central priority, but growth cannot be achieved without addressing the cumulative pressures facing businesses on the ground.

Ahead of the Autumn Budget, we need a coordinated approach to energy costs, business rates and the wider cost of doing business, alongside measures that protect consumer confidence and disposable income.

The night time economy is a vital part of the UK’s economic and cultural infrastructure. Businesses need the stability and confidence to invest, employ people and grow.”