Soaring inflation is putting one in five businesses and more than 250,000 jobs at risk, according to the Night Time Industries Association (NTIA).
UK inflation has hit double digits, according to figures published by the Office for National Statistics. The consumer price index rose by a record 10.1% in the 12 months to July, up from 9.4% in June.
NTIA chief executive Michael Kill said: “Inflation reaching double puts further pressure on businesses, placing more than a quarter of a million jobs at risk and one in five businesses on the brink of failure in the next six months.
We are seeing businesses handing the keys back to landlords every week, as operating costs become completely unsustainable. Time is running out for the government to intervene. At this moment, we need a decisive leader who will stop escalating energy prices and give further relief to struggling businesses by reducing VAT and extending business rates relief.”
Brian Perkins, President, Budweiser Brewing Group UK&I said: “Like many businesses across the brewing and hospitality sectors, we are facing severe economic headwinds. Today’s ONS figures highlight the need for further Government support and clarity on plans to ease these pressures. Beer brings significant value to the UK economy as well as providing employment opportunities, but we are facing challenges in the form of commodity prices and beer tax.
To continue driving forward our shared prosperity and producing the UK’s most sustainable beers, we are asking Government to look ahead. Businesses need ample time to structure policies and schemes for the longer-term, as well as incentives to invest in sustainability – to help protect our industry, our people and our planet.”
Neil Manhas, General Manager, UK and Chief Financial Officer, Europe, Pizza Hut UK & Europe said: “Surging energy prices, rising food costs, and geopolitical uncertainty continue to hammer the UK economy. And as we hit double-digit inflation, today’s figures are just another stark reminder of how this is impacting business as usual. For hospitality, the pressure is even higher. With an endemic labour shortage crisis, supply chain disruption, and skyrocketing price rises across food, fuel, and utility supply chains – inflation is impairing the industry’s road to recovery.
We know the key to resolving our economic difficulties is achieving growth, and hospitality is instrumental to this. Yet, amid such a backdrop, our industry needs to hear from our next prime minister about how they plan to tackle the cost-of-living crisis and prioritise business protection. For our sector, this includes lowering VAT for hospitality back to 12.5%, so businesses like ours can continue to deliver on our promise to generate jobs and look after our communities.”
Viv Watts, cofounder of a small UK business, AGO Hotels and international property investor said: “Figures out today showing UK inflation has hit 10.1% is more unwelcome news for the hospitality industry. This increase comes at the same time as rising energy costs, tightening of cashflow and a challenging labour market. Up until now, to maintain competitive pricing, businesses have absorbed inflationary pressures rather than increase their prices for consumers. However, as costs are escalating faster than they have in three decades, businesses will now have no option other than to pass these on. Now more than ever the sector needs a reduction in VAT, that many have called for, this will allow relief and will help to balance some of the pressures.”