UKH welcomes ‘short-term’ fix of interest rate cut

UKHospitality has welcomed the Bank of England’s interest rate cut from 5% to 4.75%, saying it is “positive news in the short-term”, particularly those still struggling with pandemic debt repayments, and consumer confidence.

However, the trade body said it believes the benefits of this cut is overshadowed by the looming £3.4bn worth of cost increases that will hit the industry in April 2025.

According to UKH boss, Kate Nicholls, the changes outlined in the autumn budget will impact the potential for future interest rate cuts as well.

Nicholls said: “We need the government to take action to mitigate these increases. particularly the lowering of the employer NIC threshold. Lowering the threshold to £5k suddenly brings in thousands of part-time staff, and that disproportionately hits hospitality. Government action to reduce the devastating cost impact in April is essential.”

The nightlife industry also faces rising operational costs and declining consumer spending despite the Bank of England’s interest rate cut, the Night Time Industries Association (NTIA) has warned. 

Michael Kill, CEO of the NTIA, added: “While the Bank of England’s rate cut from 5% to 4.75% offers some relief, it does little to ease the mounting economic pressures on the nightlife sector, which are only intensified by the recent autumn Budget. 

“The NTIA calls on the government to fully understand the compounded impact of these policies and to prioritise long-term, targeted support for the nightlife industry, which plays a critical role in both the UK economy and its cultural fabric during these uncertain times.”