Inflation hits 40-year high of 9.4%
Newly released figures from the Office for National Statistics (ONS) clocked inflation at 9.4% last month, up on May’s figure of 9.1%.
Inflation has now risen for nine months in a row, with the two biggest drivers rising fuel and food prices.
The rise will heap more pressure on the Bank of England to raise interest rates, which would further squeeze many household budgets.
Restaurants are already reporting a marked softening of demand and lower spends as the historic cost of living crisis bites.
Poorer household are being hit harder by rising cost, the Resolution Foundation think tank warns, but the government says the UK will see a “marked improvement” next year.
In response to the news Pizza Hut UK and Ireland’s managing director Neil Manhas called for VAT to be lowered back to 12.5%.
“As inflation figures continue to rise in an uncertain political landscape, pressure on the hospitality sector mounts. Our industry is navigating continued labour shortages, skyrocketing food, fuel and utility prices and supply chain disruption. This coupled with softening consumer confidence is a heady cocktail – and is making the day to day for businesses such as ours very difficult.
"Growth is a key driver of economic recovery - and we want to continue playing a role. At Pizza Hut, we want to realise our development plans to both create and protect jobs and support our communities and consumers. To do this, we need the new Government to prioritise protections for businesses that provide opportunity.”
Brewer Budweiser has also called for more government support, arguing the case for a reduction in beer tax, a delay of DRS and other packaging taxes as well as for Whitehall to provide incentives for companies to invest in sustainability.
“Like many other businesses, we have been hard hit by commodity price increases and import taxes for beer have increased above average,” says president of Budweiser Brewing Group Brian Perkins.
“We know that beer is hugely important to the UK economy, especially in driving the post-Covid recovery. In the UK, the beer sector as a whole is responsible for nearly 900,000 brewing and pub jobs, and the value of these jobs to the UK economy is £22.9 billion.”
"At Budweiser Brewing Group, we are committed to supporting the long-term recovery and resilience of the hospitality sector, as well as driving forward our shared prosperity for our partners and communities and producing the UK’s most sustainable beers.”
