Interest rates hike will inflict “economic pain” on hospitality venues

12th May 2023 | Jack Oliver

Further rises in interest rates are set to inflict “economic pain” on the hospitality industry, the chief executive of UKHospitality has said.

The Bank of England increased interest rates from 4.25% to 4.5% on Thursday, the highest level in almost 15 years.

UKHospitality chief executive Kate Nicholls said: “Interest rates reaching their highest levels since 2008 will be a huge worry for hospitality businesses and could significantly impact business viability.

“Hospitality was the business sector most affected by the pandemic, with a large number of businesses forced to take out loans to survive. With those loans now due, consistently rising interest rates compound debt and inflict further economic pain on venues.”

Interest rates were increased as part of the Bank of England’s measures to reduce inflation, which currently sits at 10.1%. The bank’s target is 2%.

The Bank of England said that uncertainties around the global financial and economic outlook “remain elevated”.

Nicholls added that the hospitality sector is in a period of “peak energy pain”.

“Urgent action is needed from Government to bring costs down, particularly on energy, and more needs to be done to assist businesses in their pandemic debt. We would urge HMRC to be lenient in their demands from businesses at this point, allowing Time to Pay arrangements”, she added.


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