By Denis Sheehan MIH: Chancellor watches imminent energy inflation rise, alongside water rates, without action.
Over the past year hospitality and catering businesses have been forced to contend with exceptional cost inflation from rising energy prices, and continue to. Later this week government help with managing energy cost inflation ends.
The chancellor in his 15 March budget gave businesses 16 days notice of ending government’s Energy Bill Relief Scheme on 1 April.
The impact on hospitality and catering businesses will be severe, hampering profitability for everyone, and all too many finding the withdrawal of support terminal.
Research carried out by the Federation of Small Businesses warns circa 370,000 small businesses that fixed their energy bills in 2022 may need to downsize, restructure, or close completely when support ends on 1st April.
Most businesses will also receive a substantial increase in their water rates from 1 April 2023. The specific increases for businesses will depend on the region supplying water. Business water rates are expected to increase by an average of 14.4% in April 2023. How water costs vary, how they are structured, and the lack of effective competition in the business water market for small businesses is examined here.
So, yet more cost inflation is now only days away for hospitality and catering businesses.
The chancellor described his budget as “a budget for growth” and identified inflation as the biggest challenge to the economy. Without help from him and his government to tackle inflation, his ‘words’ are sterile.