Hospitality trade bodies have welcomed another drop in inflation levels, and have urged it is now times for interest rates to come down.

The latest official figures showed UK inflation fell to 2.3% in the year to April, the lowest in almost three years. Inflation is now at a low that hasn’t been seen since 2021 according to Office of National Statistics (ONS) and was a sharp drop from last month where in the year to March, the figure was 3.2%.

The level is now closer to the Bank of England’s 2% target, which trade bodies have shows it is time for interest rates to be cut. 

The news offers hope of an interest cut from the Bank of England as early as June this year. The decision will be announced on 20 June. The day before, the ONS will announce the inflation figure for May.

UKH chief executive Kate Nicholls said: “Hospitality has weather unprecedented costs, including from Government policy. “Today’s inflation data continues 18 months of improvement and we are now at a normal level of inflation.” 

She added: “The trend is clear and the Bank of England can now act with confidence. It’s time for interest rates to come down to support businesses investing in their growth. “We should be ahead of the curve, not behind it.”

British Beer & Pub Association chief executive Emma McClarkin said:“The sector has been hard hit by the cost-of-living crisis, with margins squeezed beyond what many have been able to bear.

“While April’s inflation figure is just above the Bank of England target, it will be hoped there will now be a cut to interest rates. These two factors combined should help generate some much-needed growth across the beer and pub sector ahead of what we hope will be a bumper summer of sport combined with more people enjoying a beer in the warmer weather.” 

The Confederation of British Industry believes the latest inflation figures sets the stage for interest rate cuts in coming months. 

Alpesh Paleja, CBI lead economist, said: “A big fall in inflation was always on the cards for April, given Ofgem’s 12 per cent cut to the energy price cap. Households and businesses will welcome a more benign inflationary environment, but it’s worth noting that many will still be struggling with a high level of prices, particularly in food and energy bills.

“Today’s data further sets the stage for interest rate cuts in the coming months. While the Monetary Policy Committee is likely to reduce interest rates over the summer, they are still holding out for more definitive falls in measures of domestic price pressures.

Prime Minister Rishi Sunak said there is still “more work to do” and that it would take time for many to feel the full benefits of the improvements in inflation. 

“Wages have been rising faster than prices for almost a year now, energy bills are down hundreds of pounds now from where they were, mortgage rates are down from the peak and today’s news on inflation being back to normal is very welcome.

“If you put all of that together it shows we have got momentum, it shows that the plan is working but of course there is more work to do for people to really feel the benefits of all these things.

“That is why it is important that we stick to the plan. As I have said, these things don’t happen by accident,” he said.