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‘What we are facing in terms of rising costs could have a worse impact than the pandemic in terms of business closures’

Communities across the country are in danger of seeing their local pubs call last orders for the final time because the businesses can no longer handle mounting inflation.

Soaring prices could harm ailing pubs even more than did the repeated closures that accompanied the Covid-19 pandemic, with many on the brink of collapse.

Vast energy bill hikes and rapidly rising food and drink prices will force hundreds of hospitality businesses to close in the coming months, a loss that will be felt most deeply in rural areas, where local pubs commonly function as linchpins that bring residents together, industry leaders have warned.

Inflation has reached double figures, climbing to a 40-year high of 10.1 per cent in July, the Office for National Statistics announced on Wednesday.

Energy bills, mortgage costs and food prices all pushed the figure up, with prices now rising at five times the rate they were this time last year.

Abbie Marshall, who owns the Buck Inn in the North Yorkshire village of Thornton-Le-Dale, has had to raise her menu prices four times in six months as inflation has ballooned, and is braced for a hard winter.

“The unpredictable and extreme nature of the price increases [mean] that I can’t plan ahead, and I know it’s only going to get worse come winter when we need to heat the pub, which is an 18th-century stone building,” she said.

“The absolute last thing I want to do is pass on costs to my customers or price locals out of their pub but it’s becoming increasingly difficult to make ends meet and without relief from the Government, I can’t see how it’s going to get any better.”

Emma McClarkin, chief executive of the British Beer and Pub Association, said publicans were stuck “between a rock and a hard place” as they attempt to cope with rising bills while customers are cutting back on spending.

“[Pubs] need to cover their costs, but they also have customers who are tightening their belts, it’s completely unsustainable,” Ms McClarkin said.

“It’s not an exaggeration to say what we are facing in terms of rising costs could have a worse impact than the pandemic in terms of business closures,” she added.

Kate Nicholls, CEO of trade body UKHospitality, said: “On average, hospitality businesses are facing annual energy bill increases in excess of 300 per cent – and this is on top of soaring food and drink costs, rising wage bills and record staff shortages. At the same time, customers are experiencing a cost of living crisis that will squeeze their spending, all of which puts at further risk an already fragile hospitality sector.

“The result will be hundreds of failed businesses, thousands of lost jobs and, for some communities, the closure of much loved and relied upon local pubs and restaurants which, [especially] in rural areas, are vital social hubs.”

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