Inflation is easing the restaurant and hotel sector, down to 7.6% in October from 8.6% in September.
Today’s data from the ONS shows inflation also continues to soften across the wider economy, with Consumer Prices Index (CPI) rising by 4.6% in October, down from 6.7% in September.
This marks the the first time in two years that the inflation number begins with a 4, and the lowest rate of inflation for two years.
Restaurant and hotel prices remained the same between September and October 2023, according to the ONS, compared with a rise of 1.0% between the same two months a year ago.
This resulted in an easing in the annual rate to 7.6% in October 2023, down from 8.6% in September and a peak of 12.1% in February.
As the negative contribution from catering was small, the easing in the rate reflected the downward effect from accommodation services, where prices fell by 2.5% between September and October 2023 compared with a rise of 1.2% between the same two months last year.
The downward effect came almost entirely from overnight hotel accommodation, where prices fell by 9.2% between September and October 2023 compared with a rise of 1.1% between the same two months last year.
Reacting to the news, UKHospitality chief executive Kate Nicholls said that while a significant decrease in inflation is encouraging to see, all of that will be put at risk if the Chancellor does not take action at the Autumn Statement “to avert the looming business rates bill facing hospitality.”
She said, “Almost a billion pounds of extra cost will be set upon the sector in April if the current relief scheme ends and rates increase with inflation.
“We already know from our members that the direct impact of that will be almost two-thirds putting up their prices, as they simply cannot absorb any additional costs.
“The Chancellor can ensure this doesn’t happen and that we avoid an inflationary spike early next year by extending business rates relief for a further year and freezing rates.
”The decisions hospitality businesses make can really drive or curb inflation and we would urge the Chancellor to work with us to help deliver positive economic outcomes.”
