Strangling hospitality demand not the solution to inflation

By Ed Bedington

- Last updated on GMT

Interest rate rise hitting pubs will not tackle inflation

Related tags Inflation Interest rate Bank of england Pubs Government ukhospitality Pub & bar Consumer confidence

The idea that raising interest rates to try to curb consumer spending in pubs, bars and restaurants is another slap in the face for a sector that seems to have become the whipping boys for the authorities.

The Bank of England (BoE) recently announced it was again increasing interest to try and curb inflation, as though inflation is being driven by the careless spending of consumers refusing to face the economic realities of the situation.

The reality is that the BoE seems to be refusing to face the economic realities of the situation - inflation is not being driven up by the spending habits of consumers.

The rapid escalation in fuel, utilities and food prices is the main driver of the spiralling costs, not people that are still trying to find some kind of enjoyment in life by popping to the pub.

Pubs and bars are being hammered by the inflationary pressures and now appear to be caught in a crossfire between forces out of their control and the heavy-handed, out of date approach by the authorities and the BoE.

Pubs are hanging on by their fingernails as they watch their costs ratcheting upwards. For many, the only thing keeping them going is the few consumers who are still willing to give them the support they desperately need.

For the BoE to now actively target those consumers feels like a low blow and one that doesn’t appear to be well thought out.

The hospitality sector is a massive part of the economic landscape, contributing hugely in both taxes, spend and as an employer.

By seeking to cut the sector down at the knees by strangling demand, the Bank is hampering the economic recovery this country desperately needs - we need to be encouraging trade and spending to kickstart our flagging economy, not looking to stamp out the few embers left burning in the fire.

How about the Government wakes up from its torpor and actively targets the real causes of the rampant inflation we’re facing, rather than relying on out of date and ill-matched policies from the past to make the problem worse.

Related topics Rebuilding the Pub Sector

Related news