Interest rate rise will inflict ‘economic pain’ on hospitality
May 11, 2023
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The Bank of England announced today [Thursday 11 May] that it would be raising the interest rate by 0.25%, bringing it to 4.5%. This is the highest level since October 2008.
Our Chief Executive Kate Nicholls said that the hike would inflict ‘economic pain’ on hospitality businesses, as many were forced to take out loans to survive during the pandemic.
She 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.
Loan repayment is not the only price pressure businesses face, with the sector now 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.”