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BUSINESS: Rate Cut Fails to Cheer Craft Traders
Listed under: News
Published: Thursday, February 07, 2008
News from the Bank of England that it will cut interest rates to avoid any last-minute slashes further down the line has been welcomed by the retail watchdog British Retail Consortium (BRC). "Having rejected a January rate cut, the Bank is right to act now to refuel the faltering economy and ensure it doesn't stall,” says the BRC's new director general Stephen Robertson. However craft retailers are not so sure that the quarter percent cut will make a difference. “What troubles me most is a lack of orders that I would normally expect to have received by now,” says Catherine Spalding, owner of Silken Strands in Bangor. “I do think the problems are connected to what's been going on in the economy but a bigger problem for craft shops is the rise of other sales channels like eBay.”
“I think it might make a difference,” concludes Catherine, “but not the big improvement we're all hoping for.” Despite such views, the BRC is pleased to see the Bank of England guide the economy in the right direction. "Household bills are rising and there are job fears,” continues Stephen. “Without a series of reviving rate cuts, consumer pessimism risks becoming self-fulfilling. Discounting moved up a gear over the last three months. Many retailers are suffering as costs rise much faster than selling prices, so job cuts could be forced upon retailers under pressure.
"Even dramatic rate cuts would take months to make a difference. What's needed is a series of considered, pre-emptive cuts, to avoid the need for Fed-style, last minute rate slashing later on. Let's be clear, the sooner the Bank cuts again, the better for everyone."
“I think it might make a difference,” concludes Catherine, “but not the big improvement we're all hoping for.” Despite such views, the BRC is pleased to see the Bank of England guide the economy in the right direction. "Household bills are rising and there are job fears,” continues Stephen. “Without a series of reviving rate cuts, consumer pessimism risks becoming self-fulfilling. Discounting moved up a gear over the last three months. Many retailers are suffering as costs rise much faster than selling prices, so job cuts could be forced upon retailers under pressure.
"Even dramatic rate cuts would take months to make a difference. What's needed is a series of considered, pre-emptive cuts, to avoid the need for Fed-style, last minute rate slashing later on. Let's be clear, the sooner the Bank cuts again, the better for everyone."
