The Consumer Prices Index (CPI) rose by 3.8% in the 12 months to July 2025, up from 3.6% the previous month, according to the latest estimations from the Office for National Statistics (ONS).
In addition, the 12-month inflation rate for food and non-alcoholic beverages rose for a fourth consecutive month, to 4.9% compared with 4.5% in June. It was the highest recorded figure since February 2024.
Moreover, four of the 11 classes measured by the ONS contributed to the upward rate of core inflation, notably beef prices.
Analysis of the ONS data revealed that food prices increased by around 37% over the five years to July 2025 compared with a rise of 4.4% during the previous five-year period.
Inflation trap
One top of this, high energy prices and rising taxes, in particular wage and national insurance costs, have forced more than half of venues to operate below capacity.
Earlier this week, the Morning Advertiser (The MA) also reported eight pubs a week were lost between December 2024 and June 2025.
UKHospitality (UKH) chair Kate Nicholls said: “It’s clear the UK economy is stuck in a low growth and high inflation trap, and the only certainty is that increasing taxes and costs would make the situation worse.
“Our latest member survey data showed the £3.4bn in additional annual cost that hit the sector in April has forced eight in 10 hospitality businesses to put up prices – which is no doubt a factor unfortunately fuelling inflation.
“Pulling the tax lever on hospitality once again would be the worst possible thing to do and instead the Government should lower business rates, fix NICs and cut VAT at the Budget to back hospitality and stop the sector from being taxed out.”
Night Time Industries Association (NTIA) CEO Michael Kill added the figures underscored the “relentless pressure” on firms within the sector.
Meaningful cuts
“Hospitality and night time economy businesses are facing sharply higher costs for food, energy, and transport at a time when margins are already wafer-thin. After years of cost-cutting, the sector has reached its limit.
“Persistent high inflation continues to threaten the sector, which is still attempting to rebound from the pandemic and subsequent cost pressures.
“Policymakers need to recognise sustained price rises do not only hit households but also the businesses that underpin vibrant city centres and cultural life. Supporting operators to remain viable while maintaining quality and employment is essential”, he continued.
Ahead of the upcoming Autumn budget, a spokesperson from the British Beer & Pub Association (BBPA) urged the chancellor to find ways to make a meaningful cut to business rates.
The spokesperson said: “These figures are a further blow to brewers and publicans who are already grappling with a cost-of-doing-business crisis on top of painful extra rates and taxes from last year’s Budget.
“It means it is even more critical that this Autumn the Chancellor finds a way to cut business rates via her long-awaited reforms to the system.”
