According to the Office for National Statistics, gross domestic product (GDP) fell by a larger than expected 0.3% in the three months to December after a decline in all main sectors of the economy and a collapse in retail sales in the run-up to Christmas.
It followed a drop of 0.1% in the third quarter, confirming a second consecutive quarter of falling national output – the technical definition of a recession.
Kate Nicholls, chief executive of UKHospitality, warns that official confirmation of a recession will be a ‘big worry’ for businesses.
“The economy officially entering a technical recession is hugely concerning,” she says.
Consumer confidence has already taken a huge hit over the past year as the cost-of-living crisis bites and today’s news will dent it even further.
“That will be a big worry for hospitality businesses up and down the country, as they need support from consumers more than ever.”
Looking ahead to next month’s Budget, Nicholls says she is urging Chancellor Jeremy Hunt to ‘look to hospitality as a sector that has a proven track record of driving growth and stimulating demand in the economy’.
“Introducing a lower rate of VAT for hospitality and capping business rates increases would allow venues to reduce those incredibly high business costs and keep price rises at bay – that would be good for the public, businesses and the economy,” she adds.