At its meeting on Wednesday 19 March, the Bank of England Monetary Policy Committee (MPC) voted by a majority of 8–1 to maintain interest rates at 4.5%. One member preferred to reduce Bank Rate by 0.25 percentage points, to 4.25%
The Bank attributed the decision to geopolitical uncertainties, namely the range of tariffs announced by US President Donald Trump this month and the German Government’s reformation plans, alongside rising inflation in the UK and weak GDP growth.
Precarious economy
UKHospitality (UKH) CEO Kate Nicholls said: “It’s disappointing that the Bank of England has chosen to hold interest rates yet again.
“The precarious state of the economy is no secret, with the most recent GDP figures indicating the fragile state it’s in. It’s therefore vital to kickstart growth and hospitality has a unique potential to drive growth in communities across the nation, if it is properly backed.”
The update comes ahead of the tax rises announced in the Autumn Budget coming into force next month, including ENICs, which UKH estimated would hit the sector with £3.bn in additional costs annually.
Viable spaces
Nicholls continued: “Businesses across our sector generate more than £140bn in revenue each year and provide work for more than 3.5m people but are shackled by soaring costs that are inhibiting growth. This will only get worse in April.
“Cuts to interest rates, as well as a delay to the impending lowering of the National Insurance Contributions threshold, is the bare minimum hospitality businesses need in order for them to continue to provide viable spaces for us to live, work and invest in.”
The MPC will next meet on Monday 7 May with an update on interest rates announced on Tuesday 8 may.
