Inflation rate for restaurants and hotels hits 31-year high

Rising from 10.2% in November, it's the highest price inflation rate recorded across the hospitality sector since the constructed historical estimate of 11.4% in September 1991.

Alongside price rises in the food and non-alcoholic beverages category, it was also one of the largest upward contributors to the overall inflation rate in December.

Across the board, UK inflation actually fell back slightly in December to 10.5%, down from 10.7% in November and a peak of 11.1% in October.

The fall in the Consumer Prices Index (CPI) was driven by a significant drop in fuel prices as well as a decline in clothing and footwear prices growth compared to December 2021.

Grant Fitzner, chief economist at the ONS, said: “Inflation eased slightly in December, although still at a very high level with overall prices rising strongly during the last year as a whole.”

The increase in the annual rate for restaurants and hotels reflects price rises of 0.9% between November and December last year, compared with price falls of 0.1% between the same two months in 2021.

The effect came primarily from accommodation services, where prices rose on the month, compared with a fall in the same month a year earlier, particularly for overnight hotel accommodation.

Fairly broad-based rises in restaurant and café prices averaging 0.7% also contributed to this effect, compared with a smaller rise of 0.5% in the previous year.

“Prices at the pump fell notably in December, with the cost of clothing also dropping back slightly,” added Fitzner.

“However, this was offset by increases for coach and air fares as well as overnight hotel accommodation. Food costs continue to spike with prices also rising in shops, cafés and restaurants.”

Food and non-alcoholic beverages annual inflation has now risen for 17 consecutive months, with prices rising by 16.9% in the 12 months to December 2022, up from 16.5% in November.

According to the ONS, indicative modelled estimates suggest that the rate would have last been higher in September 1977, when it was estimated to be 17.6%.