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UKHospitality has expressed disappointment in the Bank of England’s decision to hold interest rates at 4.75%, which came after a recent hike in both inflation and wage growth.
At its meeting this week, the bank’s monetary policy committee voted by a majority of 6–3 to maintain the current rate. Three members voted to reduce interest rates by 0.25 percentage points to 4.5%.
The trade body said it believes that a rate cut could have helped incentivise economic growth and relieve the pressure of high interest rates on businesses, particularly those within the hospitality industry that are still repaying Covid loans.
Kate Nicholls, CEO of UKHospitality, said: “While inflation increasing for the second consecutive month is concerning, generating economic growth has to be the priority.
“Interest rates coming down and a rethink of changes to employer NICs will both be critical components in providing hospitality businesses with the financial headroom they need to invest and grow.”
The BoE yesterday (19 December) said this rise was “slightly higher than previous expectations”, and means the inflation figure is still above its target of 2%.
According to the Office for National Statistics (ONS), the main drivers behind the rise were fuel and clothing, where prices rose this year but fell a year ago. The BoE added that inflation is expected to continue to rise slightly in the near term.
