The Office for National Statistics (ONS) announced on Wednesday 15 November the headline rate to inflation had fallen to 4.6% in October, down from 6.7% in September, the lowest rate since October 2021.
Non-alcoholic drinks, food costs and energy prices made the biggest downward contributions to inflation.
However, Night-Time Industries Association (NTIA) CEO Michael Kill said this was “no time to break out the champagne”, adding for many night-time economy businesses the figures “warning sign of ongoing hardship”.
“The headline-grabbing numbers don't tell the real story – operational costs and trading conditions for night-time economy businesses continue to be a challenge. The struggle is far from over, and the clock is ticking on livelihoods.
“Behind the scenes, thousands of businesses are suggesting the so-called victory won't pay the bills. The stark truth is, if the Government doesn't act fast, job losses and closures are inevitable. It's time for more than just statistics – it's time for action”, he continued.
UKHospitality (UKH) chief executive Kate Nicholls added while the “significant decrease” was “encouraging”, it would be “put at risk” without action on business rates in the upcoming Autumn Statement.
According to the trade body, an extension on business rates relief for hospitality businesses and a freeze to the multiplier would save the sector some £630m, avoiding an inflation-linked rise of £234m.
Moreover, a recent survey of UKH members revealed 61% of firms would be forced to increase prices if business rates were to rise in April.
The data also showed 66% of those surveyed would reduce investment, while 61% would need to reduce staffing levels, 42% would reduce opening hours and 22% would have to close sites.
Nicholls 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.
Positive economic outcomes
“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 drive or curb inflation and we would urge the Chancellor to work with us to help deliver positive economic outcomes.”
The UK Spirits Alliance also urged the Chancellor to take action in next week’s statement, due to take place on Wednesday 22 November, calling for an alcohol duty freeze.
A spokesperson for the alliance explained the reduction to the headline rate of inflation was “very welcome” but that the figure remained “higher than it needed to be” due to the 10.1% duty increase in August.
The Spokesperson continued: “Next week, the Chancellor has a choice. He can choose between fuelling inflation and adding to cost-of-living pressures with another spirits tax hike or he can support British consumers, pubs and distillers across the country with an alcohol duty freeze.”