Budget bites Reeves has put up restaurants' costs - but who will foot the bill?

Nothing tarnishes an evening out quite like a row over the size of the bill.

- Rob Davies

But leading figures in the hospitality sector fear that Labour's first budget in 14 years has put them on a collision course with their guests over the fair price of a meal.

Neither side has much room for manoeuvre. Despite easing inflation, prices are still rising and consumers still bear the scars of a cost of living crisis that has eroded disposable income. Few will accept what one restaurateur called "expensive mediocrity" from chains that have relatively little to offer the discerning gourmand but have jacked up their prices to levels that suggest they do.

Figures from Barclays show that people are opting for Netflix over Nocellara olives. Spending on eating out flatlined in October, while outlay on digital subscriptions rose by 10%. Darker evenings and colder temperatures may be having an impact, but so too are the conditions that have made it harder for hospitality to thrive.

As they stumbled about for a secure footing after the pandemic, rampant inflation had already left pubs and restaurants facing a painful choice: raise prices to protect wafer-thin margins, or accept losses to retain customers, in the hope that conditions ease.

Into that devil's bargain came the measures introduced by the new chancellor, Rachel Reeves, which industry leaders say mean even higher prices when the bill comes.

Increases in employers' national insurance contributions (NICs), coupled with a minimum wage rise, mean employing a full-time staff member will cost an extra £2,500 from April, according to UK Hospitality.