Whitbread revealed a 24 per cent increase in first half pre-tax profits, boosted by strong growth in its Premier Inn and Costa Coffee chains, but warned that business conditions would become “more challenging” for the rest of the year.

Alan Parker, chief executive, said improved productivity and cost management had helped increase the group’s operating margin despite significant cost inflation. While Whitbread was expecting tougher conditions it had continued to make “good progress” since the end of August.