Inflation dropped to 1.7% in September, down from 2.2% in August, according to the Office for National Statistics.
The inflation rate is used to calculate the annual uplift to business rates in England, which would mean a likely increase of £48m for hospitality businesses, according to trade body UKHospitality (UKH).
This £48m will be in addition to the £866m increase the sector will see if business rates relief ends next year, taking the overall hit to the sector in April to £914m, it says.
According to UKH, business rates already make up around 5% of business turnover in the sector and, without action, that could increase as a large pub or restaurant could face a £33,500 increase in its rates.
UKH is urging the Chancellor to act to avoid what it describes as a ‘cliff edge scenario’, when relief is set to end, and introduce a lower, permanent and universal multiplier for hospitality.
“These inflation figures confirm that hospitality is set for an eye-watering £914 million tax bill in April, if the Chancellor doesn’t act at the Budget,” says Kate Nicholls, UKH chief executive.
“Business rates must be addressed, or venues at the heart of communities will see their rates bills quadruple and find themselves making awful decisions about whether to shorten hours, close more days, lay off staff, or even close their doors for good.
“A lower rate of business rates for hospitality would avoid this dreadful prospect and keep hospitality at the centre of our high streets. Measures in the Budget could be an investment in our high streets, creating new jobs driving local economic growth and securing the future of the venues that people love.”
