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RETAIL: Can Rate Cut Save Xmas for Independents?
Listed under: News
Published: Friday, December 07, 2007
The Bank of England's decision to cut interest rates for the first time more than two years has draw mixed reactions from business groups. The move, which takes rates from 5.75% to 5.5%, is designed to stem the rate of slow down in the economy and soften the effects of a 'credit crunch' in the wake of problems in the American economy.
The timing of the decision is crucial for those banking on a successful Christmas. It is hoped that the move will encourage spending after a shaky few weeks for consumer confidence. The cut has been welcomed by the Forum of Private Business (FPB) which believes it will give independent retailers a boost. “It will have been a difficult decision to make, but ultimately the FPB believes it is the correct one,” says campaigns manager Matt Hardman. “Many analysts are predicting that, in 2008, the UK’s economy will face its slowest year of growth in a decade so cutting interest rates, particularly at this important time of year, should go some way to reassuring our members.”
However the British Retail Consortium (BRC) believes that the Bank must now go further to prevent a recession in 2008. “With customers under severe pressure it is only a first step to reviving consumer confidence and will make only a marginal difference to spending this side of Christmas,” says director general Kevin Hawkins. “To soften the downturn that is clearly on the way for 2008 and avoid a full blown recession this must be the first of a series of cuts. The sooner the Bank delivers the next one the better.”
The timing of the decision is crucial for those banking on a successful Christmas. It is hoped that the move will encourage spending after a shaky few weeks for consumer confidence. The cut has been welcomed by the Forum of Private Business (FPB) which believes it will give independent retailers a boost. “It will have been a difficult decision to make, but ultimately the FPB believes it is the correct one,” says campaigns manager Matt Hardman. “Many analysts are predicting that, in 2008, the UK’s economy will face its slowest year of growth in a decade so cutting interest rates, particularly at this important time of year, should go some way to reassuring our members.”
However the British Retail Consortium (BRC) believes that the Bank must now go further to prevent a recession in 2008. “With customers under severe pressure it is only a first step to reviving consumer confidence and will make only a marginal difference to spending this side of Christmas,” says director general Kevin Hawkins. “To soften the downturn that is clearly on the way for 2008 and avoid a full blown recession this must be the first of a series of cuts. The sooner the Bank delivers the next one the better.”
