The rate of price rises has remained at 8.7% in May despite expectations of a fall, according to official figures released yesterday (June 21).
The Office for National Statistics (ONS) said annual inflation as measured by the consumer prices index held steady from the same level in April, reversing two months of gains as the spiralling cost of living adds to pressure on households. City economists had forecast a figure of 8.4%.
The ONS attributed the unchanged inflation rates to rising prices for air travel, recreational and cultural goods and services and second-hand cars, while the falling price of motor fuel offset the increases. Food inflation reduced slightly to 18.3% from 19.1% last month, the ONS said.
Stagnant inflation is holding the sector back from its full potential, sector leaders have warned.
Michael Kill CEO NTIA Says “Figures announced today shows no movement in inflation at 8.7%, replicating the rates released in April this year. This is a stark reality check for the Government, leaving inflation incredibly high that it is having a huge impact on consumers and businesses spend and investment. Even with warmer weather and numerous bank holidays and national celebrations to strengthen trade, it has not been enough to alleviate the onerous cost of operating for businesses or extend the frequency or spend of consumers looking to go out and enjoy a meal, music event or a social drink amongst friends.”
“The Government must consider tackling inflation by bringing down the costs of energy, food and drink through tax cuts, and look to ease workforce shortages, with broader considerations around deregulation, and the ability for businesses to invest in expanding trade without bureaucratic limitations or timescales.” Nicholls added: “Measures to tackle sky-high energy costs, bring down the cost of food and drink and ease ongoing worker shortages would be effective measures to bring down the cost of doing business, and in turn help reduce inflation.”
British Beer & Pub Association chief executive Emma McClarkin said: “Warmer weather has been driving sales for pubs and breweries, but the fact remains that without inflation falling, profits are wiped out and our sector has little to no opportunity for growth. These figures are worrying because while the public have been supporting British pubs and breweries, it’s clear that purse strings will be tightened once again in the coming months and UK businesses will be impacted by that. We need the government to face the reality that inflation is still incredibly high and the critical impact this has on both consumers and the businesses they choose to spend their money with.”
UKHospitality Chief Executive Kate Nicholls said: “It’s frustrating to see that the rate of inflation remains stubbornly high, with no decrease since last month’s figures. It’s clear that the ongoing high costs of doing business being passed on in prices is a contributory factor and this needs to be tackled with urgency.
“Measures to tackle sky-high energy costs, bring down the cost of food and drink, and ease ongoing worker shortages would be effective measures to bring down the cost of doing business, and in turn help reduce inflation.”