Wetherspoon chief rejects Bailey’s call to absorb prices

THE boss of Wetherspoon has warned that Andrew Bailey’s call for businesses to exercise caution over raising prices would be “catastrophic” for pubs if taken literally.

Tim Martin, founder and chairman of the pub chain, said the message from Andrew Bailey, the Bank of England Governor, was unrealistic at a time when hospitality companies were being ravaged by “ferocious” levels of inflation. Mr Bailey said yesterday that businesses should be cautious of continuing to raise prices because it could fuel further inflation, in turn forcing policymakers to push up interest rates further.

He told BBC Radio 4’s Today programme: “When companies set prices I understand they have to reflect the costs that they face.

“I would say to people who are setting prices: please understand if we get inflation embedded, interest rates will have to go up further and higher inflation really benefits nobody.”

Mr Martin said: “What [Mr Bailey] said is understandable – linking, pricing restraint to lower inflation is a fact of life. Like the headmaster saying do your homework. But with input costs so high it may not be realistic.”

Kate Nicholls, chief executive of trade body Ukhospitality, said companies had no choice but to reluctantly raise prices. She said: “To suggest that the sector should stomach these staggering cost increases ignores the real and stark situation facing venues.”

Tina Mckenzie, of the Federation for Small Business, added: “Small firms have already cut their costs to the bone ... in many cases they have no choice but to look at hiking their prices.”

Mr Martin’s comments came as JD Wetherspoon said it returned to profit in the six months to February. It posted a profit of £4.6m compared with a £26.1m loss a year earlier.