Today’s company insolvency statistics show accommodation and food services insolvencies dropped 19% from 327 in July 2025 to 265 in August 2025.
Insolvencies in the sector were also down slightly year-on-year from 271 in August 2024.
After three consecutive months of rising insolvencies, the latest fall will come as a relief for the sector.
This was likely helped by good weather over the summer, encouraging consumers to go out and socialise, which led to GDP growth of 1.2% in the sector in August. But with food inflation really biting and challenges passing on further cost increases, it’s unlikely this decline in insolvencies will continue.
Not only are operators having to factor in higher National Insurance costs, but wages in the food and accommodation sector also hit a record high in August, as operators try to hold onto staff. This combination results in a double whammy for businesses who are caught paying higher hourly wages and more tax on these payments.
Hospitality sales have been lacklustre for most of this year. Pubs were the main beneficiaries of the hot weather during the summer months, while restaurants and bars struggled. With summer trade now behind us, many will be looking to the Christmas party season in the hopes that provides a boost to sales.
The hospitality sector will be nervously waiting to see what measures are announced in the budget. There’s an opportunity for government to use the budget as a tool to kickstart the UK economy, but to do that, we need to see investment in the right areas and measures that foster confidence without driving inflation.
