Trade body UKHospitality (UKH) has shared its “disappointment” at interest rates being held for a seventh consecutive time despite easing inflation.

At a meeting on Wednesday 19 June, the Bank of England's Monetary Policy Committee (MPC) voted a majority of 7 to 2 to maintain the rate at 5.25%. Two members voted to reduce the number by 0.25%.

UKHospitality Chief Executive, Kate Nicholls said:

"It's disappointing the Bank of England has chosen not to cut interest rates.

"Inflation meeting the bank's target was the strongest signal yet that the economy is on the right track and decisive action today would have given a boost to both consumer confidence and helped reduce costs for hospitality businesses."

In addition the bank said that while GDP growth had been "stronger than expected" during the first half of the year, monetary policy would need to remain "restrictive" for long enough to "sustainably" return inflation to the 2% target in the medium term.

Nicholls added:

"The challenge now is going for growth and we hope the bank will support that with a rate cut in August."

Figures from the Office of National Statistics (ONS) showed headline rate to inflation had hit the banks 2% target for the first time in almost three years.

Driven by a reduction in food and soft drinks costs as well as the recreation and culture segments, the Consumer Price Index (CPI) saw a 2% increase in the 12 months to May, down from 2.3% in April.

Reacting to this data, British Beer & Pub Association (BBPA) Chief Executive, Emma McClarkin said while pubs and brewers would "welcome" news that the target has been achieved, energy and food and drink costs were still 25% higher than in 2022, meaning the cost of doing business remains challenging.

She continued:

"While interest rates are unlikely to be lowered during the election period, we now look forward to these easing during the summer and later stages of the year, and working with the next Government to help put the optimal fiscal and regulatory framework that will ensure the beer and pub sector does not just survive, but thrives."