Hospitality Sector Drives UK Job Losses as Cost Pressures Mount

The UK hospitality industry has emerged as the hardest-hit sector in the labour market, accounting for more than half of all job losses since last October’s Budget.

Analysis by UKHospitality, based on Office for National Statistics (ONS) data, shows that 89,000 positions have been cut across pubs, restaurants, bars and hotels since October. This represents 53% of the UK’s 164,641 job losses during the period. In proportional terms, hospitality employment has fallen by 4.1%, a contraction seven times greater than that seen across the wider economy.

Economists highlight a combination of factors driving the decline. Employers are facing higher costs from April’s minimum wage increase and elevated National Insurance contributions, while food and energy prices remain above pre-pandemic levels. At the same time, households under pressure from the cost-of-living crisis are reducing discretionary spending on eating and drinking out, directly affecting revenues.

The ONS reported that inflation reached 3.8% in July, the highest level since January 2024, fuelled by rising food and travel costs. Labour market data for May to July showed job vacancies fell by 5.8% to 718,000, with payroll employment declining in 10 of the past 12 months. The sharpest falls were concentrated in hospitality and retail.

While the Treasury has extended business rates relief and reduced licensing fees to support venues offering outdoor dining, industry groups argue these measures will not be enough to stem further losses. UKHospitality warns that total job cuts in the sector could exceed 100,000 by the time of the next Budget.

The scale of losses in hospitality—traditionally one of the UK’s largest private-sector employers—raises wider concerns for the economy. As a sector closely tied to consumer confidence, its contraction suggests household spending power remains under sustained pressure, with potential knock-on effects for retail, leisure, and related services.

1) Job Losses by Sector Since October

Data: Hospitality 89,000; Retail 40,000; All Other Sectors 35,641. Total: 164,641.

3) Inflation vs. Hospitality Job Losses (Oct 2023 – Jul 2024)

Inflation series (YoY %): 3.2, 3.4, 3.5, 3.6, 3.7, 3.9, 4.0, 3.9, 3.7, 3.8. Cumulative hospitality losses: 5k → 89k.

5) UK Job Vacancies Trend (Oct 2023 – Jul 2024)

Vacancies: total down from 760k to 718k; hospitality down from 120k to 88k.