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Inflation target being met is ‘strongest signal yet’ to cut rates

Inflation falling to 2% should give the Bank of England confidence to ease pressure on businesses through a rate cut, UKHospitality says.

In the year to May 2024, inflation stood at 2%, according to the Office for National Statistics. This is down 0.3%, compared to April.

The inflation rate which considers housing costs was 2.8% in the year to May 2024, down 0.2% compared to the previous month’s figures.

Rates cut needed

Responding to today’s inflation data, Kate Nicholls, Chief Executive of UKHospitality, said: “Inflation coming down to 2% and hitting the Bank of England’s target is the strongest signal yet for interest rates to be cut.

“It’s clear that the economy is heading in the right direction, which should give confidence to the Bank that now is the time to begin easing the sustained pressure from high interest rates on businesses and consumers.

“We need to remember that costs remain high for hospitality businesses and beginning to reduce the cost burden for the sector needs to be a priority for any incoming government.”