Retailers demand interest rate cut
The British Retail Consortium (BRC) has urged the Bank of England to cut interest rates, claiming the UK is on the brink of a “consumer-led recession”.
Its call comes after new data showed retailers suffered their worst May on record.
Retail sales from stores open for at least a year fell by 2.4 per cent in May, the biggest annual decline for the month since the BRC started compiling data a decade ago.
April saw a 4.7 per cent slide in sales, as consumers tightened their belts as they were faced by rising mortgage and fuel costs.
The BRC’s director general Kevin Hawkins said: “While some analysts still claim that the continuing weakness in retail sales is only a ‘blip’, these figures should remove any lingering doubt.
“We are now in a consumer-led recession,” he said.
Retailers are urging the Bank of England’s Monetary Policy Committee to reduce interest rates at this week’s meeting.
However, analysts do not anticipate a change in the current base rate of 4.75 per cent.
Retailers’ woes have led to a spate of recent margin-cutting promotional offers across Britain’s high streets.
But accountancy group KPMG, which collates the BRC figures, said: “The detrimental impact on margins will only become apparent as the year progresses.”
This month’s survey was taken between 1 and 28 of May.
