Government must act 'to keep a trip to the pub affordable' this Christmas
The rise in interest rates could see customers further reign in their spending over the winter and put extra pressure on hospitality operators, business groups have warned.
Yesterday (3 November) the Bank of England raised the base rate of interest by 0.75% to 3%, the single biggest increase in more than 30 years.
Emma McClarkin, chief executive of the British Beer & Pub Association (BBPA), said: "The last thing pubs and brewers want to do is put prices up for loyal customers but are stuck between a rock and hard place.
"The cost of running their businesses has become completely unsustainable, the price of key ingredients and utilities are rocketing, and now their customers will, understandably, be tightening their belts even further following the news of interest rates rising."
She called on the government to reinstate the freeze in beer duty and tackle the overall cost of doing businesses to "keep a trip to the pub affordable this Christmas".
"Spiralling inflation is driving our pubs and brewers to breaking point and many more will be forced to shut their doors for good if urgent action isn't taken to save them," McClarkin added.
Martin McTague, national chair of the Federation of Small Businesses, said consumer confidence in October was only slightly above its all-time low in September, raising concerns ahead of the festive period.
He added: "Our research found that firms in the hospitality sector had a confidence reading almost twice as negative as the overall score for all sectors in Q3, raising fears of a wave of closures if prospects do not improve this winter.
"[The] rise may be seen by markets as necessary and inevitable, but for small businesses struggling under a debt burden and seeing decreases in custom, that will be cold comfort."
"The chancellor must not forget small businesses and self-employed people in the upcoming budget."
The government will set out its autumn statement on 17 November.
Photo: Sampajano_Anizza/Shutterstock
