Trade slumps for half of hospitality firms as economic pressures mount

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According to the new data, due to increasing economic pressure, there has been a slowdown in business and a sharp decline in cash reserves.

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The Office for National Statistics (ONS) found that more than a quarter of companies said their business declined in September, reflecting slowing business and declining sales.

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The hospitality industry suffered its biggest fall last month as businesses faced higher costs and lack of demand from cash-strapped consumers.

More than half of companies in the housing and food services sector said business declined in September compared to August – twice the average across all sectors.

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A shocking amount of companies also revealed that they have limited cash reserves in case they need to access an emergency fund.

More than a tenth of businesses said they had no cash reserves at the beginning of October, while 28% said they had three months or less.

This figure has risen significantly for companies in the education industry, with 51% reporting either none or limited cash reserves.

ONS data shows UK businesses being robbed, which they say have continued to mount higher costs in recent months.

Less than half of companies reported an increase in the prices of goods and services they purchased in September compared to August, up from more than 44% in the previous month, indicating that cost inflation remains on an upward trend.

UK consumer price index inflation soared to 10.1% in September, hitting a 40-year high for the second time this year

A quarter of the firms reported a decline in their performance in September compared to the same month last year

The ONS said on Wednesday that it was driven largely by rising food and beverage prices, with dairy and meat costs being particularly hit.

But traders say the biggest impact is on energy prices.

About two-fifths of companies said higher energy bills are the main reason they are considering raising their prices from November, with up to three-quarters of firms in the housing and food services sectors rising.

About a third of businesses said they were not considering raising their prices.

It comes as the government has pledged to support homes and businesses with their energy costs, although support measures are due to kick off from April next year when a more targeted approach will be instituted.

The ONS said the combined pressure took a heavy toll on business confidence with a quarter of firms reporting that their performance in September declined compared to the same month last year.

Credit: www.standard.co.uk /

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