The Consumer Prices Index (CPI) rose by 3% in the 12 months to January 2025, up from 2.5% in the 12 months to December 2024, the latest estimates from the Office for National Statistics (ONS) showed.
Food and beverage costs also continued to put pressure on the sector, with food costs rising 3.3% during the 12-month period.
It comes as operators are preparing for increases to Employers National Insurance contributions, which could result in an additional £3.4bn in costs for the sector according to the trade body.
Worrying jump
UKH chief executive Kate Nicholls said: “This a worrying jump in inflation and should act as a stark warning of what is to come if the Government persists with its plan to inflict £3.4bn of cost on hospitality businesses in April.
“Venues are already being forced to put up prices in preparation for the increases and will undoubtedly continue to do so, as businesses have reached the limit of what they can absorb.
“Avoiding this is simple – delay the regressive changes to the employer NICs threshold, thereby allowing hospitality businesses to continue on a path of growth.
“As top contributors to economic growth in November and December, it’s clear hospitality is a solution to help the Government grow its way out of potential stagflation.”
Steep increase
In addition, the Consumer Prices Index including owner occupiers' housing costs (CPIH) jumped from 3.5% to 3.9% during this period, marking the highest figure for 10 months.
On top of this, figures from the British Beer & Pub Association (BBPA) earlier this week revealed six venues a week were lost last year.
Meanwhile, despite an overall drop in insolvencies across the sector this month, RSM UK warned cost pressures teamed with fragile consumer confidence could threaten business viability this year.
Reacting to the latest inflationary update, a spokesperson for the British Beer & Pub Association (BBPA) said: “This steep increase in inflation only adds to the impossible cost of doing business.”
