Industry reacts to increasing UK inflation rates

13/09/2017 - 09:52
Following yesterday’s (12 September) announcement that the UK’s inflation rate rose to 2.9% in August – its joint highest in more than five years – the British Beer & Pub Association (BBPA) and Association of Licensed Multiple Retailers (ALMR) have both issued government warnings.

Up from 2.6% in July, as measure by the Consumer Prices Index, the Office for National Statistics blamed the “depreciation of sterling following the outcome of the EU referendum” for rising prices.

Calling on the government to “ring forward its 2020 switch to CPI for business rates,”
 ALMR chief executive Kate Nicholls said: “There is still a pressing need for the government to apply this measure of inflation to business rates at the earliest opportunity.

“The current system linking to Retail Price Index, a measure discredited by the ONS itself, needs to be ditched at the earliest opportunity. RPI stands at 3.9% currently, and this could see eating and drinking out businesses facing another massive increase in their business rates bills.

“…The Government intends to make this switch in 2020, but it needs to push ahead right away if it wants to ensure continued investment and growth from eating and drinking out businesses across the UK.”


The BBPA has also warned that the “inflation rate should not be used to ratchet up beer taxes in the autumn budget, as currently planned” and that “the benefits of the government’s three, one penny cuts in beer duty could be undone, in a single year” if it does go ahead.

Chief executive Brigid Simmonds, commented: “A second beer tax hike this year, based on inflation, would undo much of the good work done in tackling Britain’s sky-high rates of beer duty.

“Abolishing the hated, beer duty escalator saved many pubs and jobs, after years of unsustainable tax rises. With the challenge of Brexit, and a range of other cost pressures, the chancellor should abandon plans for a beer duty increase in the budget.”
 


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