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Investment held back by high interest rates

UKHospitality has said the Bank of England’s decision to hold interest rates again continues to force businesses to divert money away from investment into paying the bills.

Seven of the Bank’s Monetary Policy Committee, which oversees interest rates, voted to hold the rate at 5.5%. Two members voted for it to be cut.

Our response

Kate Nicholls, Chief Executive of UKHospitality, said: “It’s disappointing that we’re not seeing interest rates ease when we have seen sustained falls in the rate of inflation.

“Many hospitality businesses are still struggling with Covid-related loans repayments due to persistently high interest rates, and it continues to suck money away from investment and business growth.

“Hospitality has a track record of driving economic growth, creating jobs and helping regenerate towns and cities, when it has the financial headroom to invest. A lower interest rate is a key component of freeing up cash for businesses, and I hope to see rates come down next month.”