Are we starting to see prices rise in response to the forthcoming rise in employer taxes? UK services inflation stayed at 5% in February, a tad above consensus, in no small part because of a much larger month-on-month rise in catering services prices than we’ve been accustomed to for some time. This had been one of the most tangible sources of disinflation within the overall services basket in recent months. Hospitality is particularly exposed to the forthcoming tax hike, as well as the near-7% rise in the National Living Wage, given its labour-intensive nature. This matters because services are the part of the ... (full story)