Businesses must be enabled to exit energy contracts fixed at the peak of the energy crisis, according to calls from UKHospitality.
A recent member survey shows energy costs are up 80% year-on-year, and almost half of businesses who signed a contract at the peak of the energy crisis fear their business is at risk of failure.
It comes as food price inflation in hospitality increases again to almost 22%.
As the cost of doing business continues to increase, UKH warned hospitality businesses will have no choice but to feed these increases through to the consumer, which ultimately drives inflation.
UKH chief executive Kate Nicholls said if the government is serious about halving inflation, it must tackle the ever-growing cost of doing business.
“We’ve seen today that food price inflation for hospitality has increased yet again, to almost 22%. Energy costs are hitting farmers, food producers and manufacturers, and hospitality businesses and will result in entrenched inflation, unless businesses can get out of energy contracts that were fixed far above the current market rate.”
She called on the Chancellor to raise this urgent need for action with Ofgem, as he meets with regulators.
Ofgem’s review into the non-domestic energy market has been ongoing for at least six months with no conclusions, she said.
“The severity of the situation facing hospitality businesses requires far more urgency from the regulator and this inaction has resulted in business failure, which we have continuously warned of.
“If Ofgem is unable to act and intervene in the energy market, compelling suppliers to renegotiate with customers, then I would urge the Government and the CMA to step in, properly investigate the market and do right by hard-working businesses by taking meaningful action.”
