Sacha Lord: Inflation to cause ‘continuing difficulties’

18-Oct-2023 - Last updated on 19-Oct-2023 at 08:38 GMT

'Continuing difficulties': Sacha Lord speaks out on inflation

Sacha Lord, the night-time economy adviser for Greater Manchester, has said the unchanged Consumer Prices Index (CPI) inflation rate released today (18 October) will pile further pressure on small business, especially those in hospitality.

The Office of National Statistics announced CPI inflation was 6.7% in September, unchanged from its August level.

Lord said: "We have seen the effects of inflation and resulting decreased discretionary spending on the sector over the past 12 months, and today's news will result in these difficulties continuing.

"While some venues may seem busy, especially those trading in city centres, we have to note that many sites have already altered business plans, reduced opening hours to reflect decreased turnovers, or withdrawn planned expansion or investments entirely.”

He said it was in the interest of the growth of the UK economy that the Government intervened to halt further financial pressures on the sector.

Autumn Statement

Action could include a rethink on inflation-linked tax increases and the planned removal of the current business rates relief package from April, added Lord.

More than half of pubs are also calling for a reduction in VAT from the upcoming Autumn Statement to help keep their business “profitable,” a snap poll by The Morning Advertiser has revealed.

Of the 95 survey respondents, 60% said they wanted to see Chancellor Jeremy Hunt announce a VAT reduction in next month’s Autumn Statement, while 21% felt an extension to business rates relief would be most beneficial.

In addition, 11% wanted to see more done to support the sector with energy bills and 7% called for a reduction in beer duty while 1% felt the scrapping of rules around takeaway pints would help pubs.

Government help

Licensee of the Walmer Castle pub in Notting Hill, Greater London, Jack Greenall, told The Morning Advertiser a reduction in VAT to around 12.5% for hospitality firms would be “massively appreciated” and help keep businesses “profitable”.

He said: “We’re hugely disadvantaged against supermarkets and our European neighbours. It's the common-sense thing to do, and it would be a lifeline to many of us in this industry.

“It would help us be competitive and swallow up some of the inflationary pressures so we don't have to pass everything on to the guest; we want consumers to be able to afford to come to us."