‘Inflationary effect’ Industry boss warns price rises will hit restaurants after Christmas

‘Inflationary effect’ Industry boss warns price rises will hit restaurants after Christmas

AN INDUSTRY boss has warned price rises will hit bars and restaurants after the Christmas period.

Inflation rates: Martin Lewis discusses the latest

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According to a testimony in front of MPs on Tuesday, around 20 percent of hospitality workers never returned to work from the furlough scheme. Katie Nicholls, chief executive of UK Hospitality, has said some of the members expect to raise prices three times before April 2022.

Speaking at the Environment, Food and Rural Affairs Committee, Ms Nicholls said an inability to increase prices before Christmas would lead to inflationary pressure that could cause higher prices.

She said: “For a lot of our Christmas activities, a lot will be sold and rolled over from last year, so the price is more inflexible.”

“Therefore, you’re going to see a really intense squeeze on margins in the run-up to Christmas, and then an inevitable impact felt by consumers because it will have an inflationary effect.”

She said: “Some of our businesses are expecting three price increases by April.”

Restaurant

Restaurant (Image: PA)

Rishi

Rishi Sunak (Image: PA)

Rishi Sunak faces paying out an extra £5.4billion in debt interest next year as inflation looks set to hit a 30-year high.

If inflation remained within the Bank of England’s two percent target, taxpayers would still have to fork out an eye-watering £39.9billion to service the country’s national debt, according to the Office for Budget Responsibility (OBR).

But if the retail price index (RPI) runs to the predicted six percent – this would add £5.4billion to the bill.

The hike in inflation has largely been blamed on a huge rise in the wholesale price of gas – which has shot up 250 percent since January.

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Uk

Restaurant (Image: PA)

UK

Restaurant (Image: PA)

This has combined with the global supply chain crisis and rapidly rising wages in some sectors where firms have struggled to recruit enough workers.

It is widely believed that the rise will be temporary as economies reset after the coronavirus pandemic.

But in the meantime, households face an increasing squeeze on their standards of living.

Economist Paul Mortimer-Lee told the Guardian: “A squeeze on real incomes for workers and those on Universal Credit will slow economic growth next year, with the adverse effects on consumption offset by lower savings.

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Restaurant

Uk restaurant (Image: PA)

“Meanwhile, inflation is set to peak around five percent, forcing a reluctant Bank of England to raise interest rates, albeit grudgingly.”

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