The research by commercial insurer NFU Mutual found that over half of consumers (53%) said they would increase spend on eating out, weekend breaks and leisure.
Darren Seward, hospitality sector specialist at commercial insurer NFU Mutual, said: “The encouraging sign is that there is clearly an appetite for increased spending in the UK hospitality industry amongst consumers.
“With consumer spending coming under some pressure from rising inflation, the Chancellor’s decision to ‘reset’ fiscal policy could possibly include the option of cutting VAT by as much as 5% to support growth.
“Our research suggests that even in a more probable situation of a 1% cut, up to £2.1bn*** could be ploughed into British hospitality sector businesses. With other announcements such as increased infrastructure spending seen as more likely, whether this opportunity can be delivered to customers and benefit UK businesses remains to be seen.”
A cut in VAT by 5% could provide the average UK adult with extra spending power of £547 per year, according to NFU. 18-24 year olds are the age group most likely to spend in general (78%).