UK hospitality industry in 'catastrophic' situation says expert
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Ian Wright, the chief executive of the Food and Drink Federation, has said inflation in the hospitality sector could rise by as much as 18 percent. The dire warning comes as UK firms and supply chains are rocked by labour shortages, soaring wages and increased bills.
Speaking to the Business, Energy and Industrial Strategy committee, Mr Wright said: “In hospitality, which is a precursor of retail, inflation is running between 14 percent and 18 percent. That is terrifying.
“I remember inflation going to 27 percent under the Callaghan government in 1977, and I remember a lady going around Sainsburys with stickers twice in the same hour to change the prices.
“We cannot go back to that.”
He added: “If the Prime Minister is – as I know he is – serious about levelling up, inflation is a bigger scourge than almost anything because it discriminates against the poor.”
The rate of inflation in the UK has reached its highest level since 2012 and was 3.2 percent in August, rising from two percent in July, according to the Office for National Statistics (ONS).
The Bank of England had set an inflation target of two percent, but now expects this to rise above four percent this winter.
For the hospitality sector this means to the cost of ingredients and bills will soar and in-turn increase prices for customers.
Manufacturers are also facing rises of up to 40 percent for raw materials, according to Stephen Phipson, chief executive of trade body Make UK.
Meanwhile, the lorry driver shortage in the UK is “not visibly getting better” and could take around a year to recover, industry bosses have told MPs.
Figures released by the ONS on Tuesday showed HGV driver numbers plunged by 53,000 over the past four years.
The shortfall has been accelerated by the coronavirus pandemic, but the industry had failed to attract younger recruits for many years.
The Road Haulage Association (RHA) has previously said the UK has a shortage of 100,000 lorry drivers.
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Duncan Buchanan, director of policy at the RHA said: “Things are very challenged at the moment.
“There are widespread shortages of lorry drivers, which are leading delays and frustrated trips.
“Among, our members we are still getting reports that this hasn’t eased at all.
“Things are not visibly getting better at this stage, and I know there are a number of measures that have been put in place, stepping up training, stepping tests, but on the ground that isn’t having much of an effect.”
The Government has announced a series of measures to ease the problem, including increasing the capacity for HGV driver tests.
It has also made a change to cabotage rules to allow foreign HGV drivers to make an unlimited number of pick-ups and drop-offs.
A total of 5,000 short-term visas have also been made available for non-UK lorry drivers to come to Britain for work.
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