The rate of inflation rose to 3.3% in the 12 months to March, according to official figures from the Office of National Statistics (ONS). This was up from 3% in the year to February.
While the hike was largely driven up by higher fuel prices, according to ONS chief economist Grant Fitzner, airfares and rising food prices were also upward drivers, he said.
Previous data from NIQ’s Foodservice Price Index found foodservice inflation fell in February but at the time, warned heightened geopolitical uncertainty threatened to prolong the pressure for hospitality businesses.
Heavily taxed sector
UKHospitality chair Kate Nicholls said the sector could not be expected to pick up the bill for rocketing costs down the supply chain.
She said: “The inflationary impact of the conflict in the Middle East is evident in today’s figures.
“Hospitality businesses are highly exposed to increased fuel prices, through the price of food, drink, transport and other key inputs.
“As one of the final links in the food supply chain, the sector cannot be expected to pick up the bill for increased costs down the chain.
“Hospitality is already one of the most heavily taxed sectors in the economy and there is no room to absorb further cost increases.”
Uniquely exposed
Nicholls added: “Ultimately, it will result in price rises at the till, further driving inflation.
“The impact on consumer demand should be closely monitored, as our pubs, restaurants, cafés and hotels will be the first to feel the combined hit of increased input costs and reduced spending.
“The Government should be looking closely at how it can reduce the cost of doing business for demand-sensitive sectors like hospitality, which are uniquely exposed to these kinds of economic shocks.”
Fellow trade body the British Beer & Pub Association (BBPA) called for a reduction in beer duty and permanent business rates reform to help ensure the price of a pint remains affordable.
Chief executive Emma McClarkin said: “Today’s inflation figures, coming alongside growing economic volatility and uncertainty, only underlines the eyewatering costs of doing business that too many pubs and brewers are having to endure.
“With no clear end to the continuing crisis in the Middle East which will affect energy prices and with food a drink inflation projected to increase over the course of the year, it is imperative that the government look to ways to reduce and mitigate these pressures.
“This is why we are calling on the Government to cut VAT, reduce beer duty and bring forward a permanent reform to business rates to ensure that pubs remain at the heart of communities and make sure that the price of pint is affordable to all.”
Last month (March), operators were advised to expect increased prices on products such as beer, food and furniture due to rising oil and gas prices as a result of the ongoing unrest in the Middle East.
