The UK hospitality sector suffered the sharpest drop in demand in September of any sector with demand falling for the fourth consecutive month.
Latest figures from the Lloyds Bank UK Recovery Tracker show that the tourism and recreation sector saw demand falling for a fourth consecutive month as rising inflation forced consumers to cut spending.
The sector, which includes pubs and restaurants, saw output decline at the fasted pace since February 2021, when the UK was in lockdown, according to the latest report showing a tracker score of 36.3 for the sector last month. Any figure below 50 indicates a contraction.
Jeavon Lolay, head of economics and market insight at Lloyds Bank Corporate and Institutional Banking, said: “Inflation returned to double digits, reaching 10.1% in September.”
But he said: “While we expect UK inflation to remain stubbornly high in the coming months, there are clear signs of an easing in pipeline cost pressures in our latest UK Sector Tracker report. In the third quarter, output prices rose more slowly in 12 of the 14 sectors we monitor, meanwhile input cost inflation moderated across all 14 sectors compared to the previous quarter.
“That’s not to say that businesses won’t continue to face intense cost pressures but suggests that peak inflation is near. This will be welcome news for both businesses and consumers.