UKHospitality has hit out at the suggestion from the Bank of England Governor Andrew Bailey that businesses should not raise prices above the rate of inflation, when businesses are facing energy, food and drink costs far above the current 10% inflation rate.
Hospitality businesses are already facing unprecedented cost pressures, with energy bills double what they were last year and food price input inflation of over 20%. Businesses face another catastrophic hit next week when energy support is significantly reduced, which hospitality businesses expect to cause an 82% rise in bills.
Kate Nicholls, Chief Executive of UKHospitality, said that firms had no choice but to reluctantly raise prices, in order to stay in business and save jobs.
She said: “We fully support the objective of reducing inflation – it is in all of our interests. However, hospitality businesses are under immense pressure from ever-rising bills, particularly energy, and we have already seen thousands of good businesses go bust as a result.
“Interest rate rises are compounding the sector’s problems by increasing debt repayment costs for businesses and squeezing our customers’ disposable income.
“To suggest that the sector should stomach these staggering cost increases ignores the real and stark situation facing venues across the country. It is simply impossible if we want to have a viable hospitality sector left in a year’s time.
“No business wants to raise its prices, for fear of losing sales. We all want prices to be as low as possible for consumers, and it is a minor miracle that many have held off increases for as long as they have.
“The reality is that without adequate Government support, whether it is through energy, business rates or VAT, doing as the Governor asks will just mean business failure and job losses, compounding the country’s economic woes.”