The Bank of England announced a cut to interest rates from 4.25% to 4%.
UKHospitality (UKH) chair Kate Nicholls welcomed the announcement but warned more was needed.
Growth desperately needed
She said: “While we welcome the news interest rates are coming down, the hard truth is it’s not enough to unlock the growth our sector desperately needs.
“Banks must prioritise growth by ensuring businesses can access affordable finance, especially in hospitality, which continues to face mounting cost pressures.”
She went on to call on the Government for sector-specific support to help the industry drive economic growth.
Nicholls added: “To truly revive the high street and boost job creation, the Government must go further - lower business rates through the promised 20p discount for hospitality, fix NICs by extending exemptions to young people and those moving from welfare to work and cut VAT to match our European competitors and drive investment.
“Without these measures, businesses risk being taxed out of existence. Many have already been forced to cut back - on jobs, on investment and on ambition, despite the sector being primed as a key driver to help power the UK’s economic recovery.”
Previous warnings
Earlier this week (Wednesday 6 August), the trade body also urged caution over the pace of national living wage (NLW) hikes, warning steep increases could cost jobs.
This followed the Low Pay Commission’s suggestion NLW could rise to £12.71 - up 4.1% - with a projected range between £12.55 and £12.86.
Furthermore, UKH said hospitality firms were in “survival mode” after figures found two venues a day closed during the first half of 2025.
Statistics from the latest Hospitality Market Monitor from CGA by NIQ and AlixPartners showed there were 374 fewer pubs, bars and restaurants operating at the end of June than at the beginning of the year.
This means the sector is now 14.2% smaller (net) than it was at the beginning of the Covid pandemic in March 2020 having recorded more than 16,000 net closures since.
