Reeves’s Budget so as to add 5p to a pint

Rachel Reeves’s Budget could add 5p to a typical pint of draught beer, an independent analyst has suggested, despite the Chancellor’s claim to be knocking “a penny off a pint in the pub”.

Investment manager Shore Capital warned that hikes in the minimum wage and the rate of employer’s national insurance would force up prices. But it said that the real “sting in the tail” from the Budget was Ms Reeves’s decision to lower the threshold above which employers’ national insurance contributions are paid from £9,100 to £5,000.

The change to the threshold “accounts for the bulk of a potential further c.4pc increase in employment costs (beyond the expected [minimum wage] increase) across the hospitality sector”.

Shore predicted that pub companies would attempt to cut costs as much as possible. It said they would use “further automation, efficiencies and improved labour scheduling, along with potentially narrowing wage differentials and lowering pay increases where possible, to limit some of the increase”.

Despite this, it said that prices were “likely to be the key lever” that hospitality businesses use in response to the Budget. But it flagged its concern: “At what point do customers become resistant to all this cumulative inflation?”

Pub company share prices have been hit since the Budget, with JD Wetherspoon falling 7.4pc since Oct 30, Marston’s losing 7pc and Fuller Smith & Turner dropping 7.8pc.

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Source: telegraph.co.uk