The Bank of England announced yesterday (4 August) that it would be raising interest rates from 1.25% to 1.75% - the single largest increase since 1995, with inflation increasing to above 13%, amid warnings of a long recession that will last through 2023.
Meanwhile, there were warnings from analysts that household energy bills could reach £4,200 a year by January, after Ofgem announced changes to the price cap, which will now be updated on a quarterly basis.
Kate Nicholls, chief executive at UKHospitality, says the double whammy of forecasts is further evidence that the Government must act decisively to bolster the plummeting confidence of hospitality businesses.
“Our sector is a massive potential driver of growth and employment, but is laden with debt, has a mammoth staffing crisis and, due to inflation and energy prices, is seeing consumer confidence and discretionary spend evaporate. Increasing monthly mortgage payments as a result of the interest rate rise will only hit that discretionary spend harder,” Nicholls said.
“There are many fragile companies out there and further business failures will become inevitable without prompt action.
“The Government and Prime Ministerial candidates must clearly set out how they will tackle the cost of doing business – the cost of living won’t come down without it – and then explain how their plans will help consumers and the economy through this winter and beyond.”
