UKHospitality calls for ‘urgent action’ after gloomy economic forecast

UKHospitality has urged the government to act “sooner rather than later” to tackle the energy crisis after it was warned the UK is heading towards five years of “lost economic growth”.

The National Institute of Economic and Social Research (NIESR) forecast inflation to remain “higher than anticipated” into 2027 in predictions published yesterday (9 August).

It said that although the UK is expected to steer clear of recession in 2023, there are chances of GDP contracting by the end of this year, which could result in a “60 per cent risk of a recession at the end of 2024”.

The NIESR added that real wages in many UK regions would likely be below pre-pandemic levels by the end of next year.

Kate Nicholls, chief executive of UKHospitality, said: “These figures from The National Institute of Economic and Social Research (NIESR) underline the difficulties facing UK businesses.

“The hospitality industry is a proven driver of economic growth and with consumer demand for eating and drinking out remaining stable, can play a key role in driving the UK economy into recovery. In order to deliver this, however, we need to see urgent action to bring down soaring business costs.

She added: “It is particularly important that the Government implements the recent recommendations made by Ofgem to mitigate the energy crisis – and does so sooner rather than later.

“We would also urge flexibility on Covid loan repayments, including extension to terms, options to move to interest-only payments or delay altogether, and flexible arrangements from HMRC for tax payments.

“With these measures in place the hospitality industry can create local jobs, invest in local communities and increase its tax contributions.”

It comes after Ofgem set out plans to tackle “poor behaviour” from energy suppliers last month.

More than 1,300 catering businesses have joined a legal challenge by law firm Harcus Parker against energy firms to try and reclaim hidden commissions paid to brokers.

UKHospitality has urged operators to respond to an Ofgem consultation and call for action. To find out more click here.