The interest rate cut will help businesses in the short term, but it is significantly overshadowed by the looming £3.4 billion worth of cost increases.
That’s the reaction of UKHospitality to the Bank of England’s cut of 0.25% to interest rates, to 4.25%.
“Those changes will impact the potential for future interest rate cuts, too, with forecasts already revised down following the Budget,” said UKHospitality chief executive Kate Nicholls.
“We need the government to take action to mitigate these increases, particularly the lowering of the employer NIC threshold. Lowering the threshold to £5,000 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.”
