More than half of the UK’s job losses since last year’s budget have come from the hospitality sector, according to new analysis, raising alarm over the future of restaurants, pubs, bars, and hotels across the country.
Figures compiled by UKHospitality from Office for National Statistics (ONS) data show that around 89,000 jobs have been lost in hospitality since October 2024, accounting for 53% of all redundancies nationwide. Industry leaders warn that the total could rise to 100,000 job losses by the next budget unless urgent government support is introduced.
Sector Calls for Tax Cuts
UKHospitality, which represents more than 123,000 venues across the country, said the burden of rising business costs—combined with tax hikes introduced by Chancellor Rachel Reeves in the Autumn Budget—has hit the sector disproportionately. The group is urging the government to cut business rates and VAT to help struggling employers.
Kate Nicholls, chair of UKHospitality, described the situation as “staggering,” telling BBC Radio 4 that a third of hospitality businesses have reduced their opening hours, one in eight have closed sites, and 60% are cutting staff numbers. She warned that the scale of closures could soon rival the losses experienced during the Covid-19 crisis.
Rising Costs and Falling Demand
The challenges facing the sector have been compounded by an April rise in the minimum wage, higher National Insurance contributions, and soaring energy and ingredient costs. Employers now face significantly higher expenses at the same time as consumer spending is shrinking due to the cost-of-living crisis.
Prices in the UK rose by 3.8% in the year to July, driven largely by food and air fares, pushing inflation to its highest level since January 2024 and well above the Bank of England’s 2% target. As households cut back on dining out, sales and profits for leisure industries have fallen sharply.
Manchester bar owner Mark Wrigley told the BBC he had stopped paying himself in order to save costs. “We probably generate £300,000 or £400,000 for government from this one business, and yet I get nothing from it,” he said.
Treasury Response
The Treasury defended its policies, insisting that it is supporting pubs, cafes, and restaurants. A spokesperson highlighted extended business rates relief, cuts to licensing fees to expand al fresco dining, and a freeze on alcohol duty for draught pints.
However, ONS data shows the wider jobs market is also weakening. Between May and July, job openings fell by 5.8% to 718,000 across nearly all industries, with hospitality and retail experiencing the steepest declines. Payroll employment has now fallen in 10 of the last 12 months.
With businesses warning of further closures and job cuts, the government faces increasing pressure to deliver targeted relief for one of the UK’s most vital industries.
