The Bank of England has maintained the interest rate at its six-year high of 5.75 per cent, putting paid to retailers’ hopes of a decrease.
Retailers fear that a squeeze on consumers’ spending power could hit sales and believe that a rate cut would improve shopper sentiment.
BRC director-general Kevin Hawkins said: “There is clear evidence that disposable incomes are getting squeezed by higher living costs and the credit crunch, and the possibility of higher mortgage payments is making consumers increasingly wary.”
He said that the threat of inflation – one of the Bank’s prime concerns – is receding and called on the Monetary Policy Committee to cut rates when it meets next month. “Consumers and retailers desperately need the relief,” he added.
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