Inflation soared more than expected in July as demand for summer travel saw air fares climb by 30.2% between June and July, this is the largest rise since data collection started in 2001.
The average price of petrol rose by 2p per litre and diesel by 2.9p per litre between June and July.
Restaurant and hotel prices rose last month due to a rise in overnight stays which were booked the night before.
Annualised inflation came in at 3.8% in July, up from the 3.6% reported in June, it was forecast to come in at 3.7%.
Core Inflation came in at 3.8% in the 12 months to July, up from the 3.7% in June and higher than forecast.
The Chancellor Rachel Reeves is being warned there is no more fat to trim as the hospitality sector is facing severe job losses and businesses face closure.
Michael Kill, CEO, Night Time Industries Association said, “Today’s inflation figures, with prices rising to 3.8 per cent in July, underscore the relentless pressure on the UK’s night-time economy. Hospitality and night time economy businesses are facing sharply higher costs for food, energy, and transport at a time when margins are already wafer-thin.
After years of cost-cutting, the sector has reached its limit. There is very little left to trim without impacting quality, service, and staff levels.
“Many operators have already squeezed margins, streamlined staffing, and absorbed costs wherever possible. Some input costs are rising sharply month-on-month, leaving businesses with little room to manoeuvre without impacting quality or service.
This persistent inflation threatens to impact the night-time economy further, which is still attempting to rebound from the pandemic and subsequent cost pressures.
Policymakers need to recognise that sustained price rises do not only hit households but also the very businesses that underpin vibrant city centres and cultural life. Supporting operators to remain viable while maintaining quality and employment is essential if the UK’s night-time economy is to continue thriving.”
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