The Improvement in the Wrong Direction
Yesterday, the Morning Advertiser published the H1 insolvency figures for UK hospitality. The headline: 1,602 businesses entered insolvency in the first six months of 2026, down 6.1 percent from 1,706 in the same period of 2025. The sector has been waiting for a number that looks like progress, and that number looks like progress.
Then you read the quarter breakdown.
The second quarter of 2026 was up 10.2 percent on the first. Monthly insolvencies have stayed consistently above 260. The improvement in the half-year comparison is real, but it is an average of a trend that was getting better and then got worse. The first quarter held. The second quarter turned.
That is not stabilisation. That is the opening position for autumn.
What the quarters are saying
A 6 percent fall in headline insolvencies for the half is the right kind of number to brief a minister with. It allows the word "improvement" to appear without technically being wrong. What it does not say is that the period improved because Q1 was relatively contained, and then Q2 went the other way.
For a sector that measures health in basis points, a 10 percent quarter-on-quarter rise is significant. Not dramatic. Not a cliff. But wrong direction, at the wrong moment, heading into the months where the fixed costs run and the covers do not.
The businesses that closed in Q2 were not businesses that ran out of ideas in June. They were businesses that had been making the same calculation since January: can the next quiet Tuesday, the next slow Wednesday, the next month where the trading does not cover the fixed overhead, be survived? At some point in Q2, for enough of them, the answer was no.
What autumn arrives carrying
The fixed costs that drove Q2 are unchanged going into autumn. VAT on a restaurant meal remains at 20 percent. The employer National Insurance contribution that rose in April is still there. The business rates relief that ran through the 2025/26 financial year has been replaced with new multipliers, with pubs receiving an additional discount for this year only. The restaurants that were not named in the July announcement are carrying the same rates they carried in Q2.
The October Budget on the 28th is when this picture either starts to move or does not. UKHospitality has a specific ask: VAT cut from 20 percent to 10 percent, across the whole sector. A YouGov poll commissioned by UKHospitality found 79 percent of the public in favour. The Treasury has a different calculation to run and it runs on the same date.
Between now and then, autumn arrives. September takes back the school holiday trade. The midweek room that filled in August goes back to looking like the midweek room it was in May. Fixed costs run at their full rate regardless of the covers sitting underneath them.
The quiet math of the empty seat
We run kitchens at the Castle Inn, Tollgate, the Bull on the Green, and the Berwick. The Q2 insolvency figure is not an abstraction from where I sit. It is the background against which every quiet Tuesday is evaluated and every table that goes dark by nine o'clock is counted.
The businesses that survive the autumn will not do it by discounting healthy nights. That route gives away the margin that keeps the lights on. They will do it by protecting full-price covers on the nights they can sell, and finding something real for the seats that were going to earn nothing regardless.
Around 4pm, when the shape of the evening becomes clear, venues list on Halfseat the tables they expect to lose: food at half price, drinks at full price, a real cut of the booking fee going directly to the venue. The rota was already set. The kitchen already prepped. The empty seat costs the same whether it fills or stays cold. The only variable is whether it earns something before service ends.
The half-year improvement is worth noting. The trajectory inside it is the thing worth watching.