UKHospitality: Urgent government action needed to bring down costs
The rise in interest rates will only "exacerbate the financial challenges" many hospitality businesses are struggling with, UKHospitality has warned.
The Bank of England raised interest rates to a 15-year high of 5.25% from 5% on Thursday - the 14th increase of rates in a row.
Governor Andrew Bailey did not confirm how long rates would remain high but said he would need more evidence inflation was falling before bringing them down.
UKHospitality chief executive Kate Nicholls called for more flexibility for businesses struggling with rising interest rates on loans taken out during the pandemic that were still being paid back.
"Hospitality businesses are particularly exposed to further rate rises, due mainly to the Covid loans many were forced to take out during the pandemic," said Nicholls.
"Yet another rise in interest rates only exacerbates the financial challenges many are grappling with, alongside high energy costs, food and drink inflation and labour shortages.
"The inflationary pressures we're facing as a nation are supply, not demand, led so we need to see urgent government action to bring down these business costs."
Nicholls said a "good starting point" would be to introduce recommendations made by Ofgem last week to help businesses tackle rogue energy suppliers and brokers.
"We would also urge flexibility on loan repayments, including extension to terms, options to move to interest-only payments or delay altogether, and flexible arrangements from HMRC for tax payments," added Nicholls.
The Night Time Industries Association (NTIA) said it was "disappointed" in the rate rise and called on the government to tackle issues limiting businesses' growth.
"Our industry can play a big part in supporting the government in bringing down inflation if we are given the platform to trade," said NTIA chief executive Michael Kill.
"The government needs to tackle some of the short term barriers to investment and growth, getting a handle on energy, food and drink costs, tackling sector workforce shortages and removing limitations to trade through deregulation."
Image: Southworks / Shutterstock
