Trade reacts as UK exits recession

This comes as data from the Office for National Statistics (ONS) showed the UK had exited a recession after falling into decline at the end of last year.

According to ONS, the economy grew by 0.6% between January and March this year, the fastest rate for two years.

UKHospitality (UKH) chief executive Kate Nicholls said the news was an indication of “the light at the end of a long tunnel”, adding the figures would hopefully “embolden consumer confidence and improve the fortune of hospitality businesses”.

Moreover, Nicholls urged the numbers also “made clear” the importance of hospitality, travel and tourism as an export product, adding it was the “single biggest positive change” in the data.

She continued: “Harnessing the potential of hospitality, tourism and travel, both at home and abroad, can really deliver on the economic ambitions of the nation, and it’s crucial the Government recognises the strategic importance of our sector.

Dark clouds 

“All of this can combine to give businesses the confidence and financial headroom they need to invest in their businesses, which will drive economic growth, create jobs and encourage regeneration of our towns and cities.

“However, hospitality GDP remained flat in the first quarter and that is reflective of the cost challenges the sector continues to face.

“We need to see the cost burden for the sector rebalanced and reduced so businesses have the ability to invest in their business and grow.”

However, the Campaign for Real Ale (CAMRA) national chairman Nik Antona urged the news was “no ray of sunshine” for the hospitality sector which was “still engulfed in dark clouds”.

“Despite not being in a recession, pubs, social clubs and taprooms, along with the brewers and cider producers who serve them, are all facing countless challenges.

“Escalating costs of goods and energy bills, unfair business rates and customers spending habits being curtailed by the cost-of-living crisis threatens to wipe out the UK’s wonderful community hubs.”

Consistent growth 

The chairman added regardless of whether the UK was in a receission or not, without “meaningful support” from Government in the form of “fair taxation”, the future looked “bleak” for the industry.

Last week, the Bank of England announced it would be freezing interest rates at 5.25%​ for a sixth consecutive time.

In addition, while inflation fell​ by two percentage points according to the latest estimations, the headline rate still rose by 3.2% in the year to March 2024.

Moreover, draught lager prices jumped 0.5% year-on-year​ in the first quarter of this year, according to official statistics.

British Beer & Pub Association (BBPA) chief executive Emma McClarkin said: “The stronger than expected quarterly growth figures are good news not just for the UK economy but especially for the beer and pub sector which relies on greater consumer confidence.

“What we now need to see is consistent and sustained growth and for this, and the next Government, to put in place a long term fiscal and regulatory framework to ensure brewers and pubs do not just survive but thrive.

“[Hospitality firms] are at the heart of the UK’s communities; they should be a driver of local economic growth and are an essential part of the revitalisation of our nation’s high streets.”