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BRC wants loan rate cut

7 June 2005

The British Retail Consortium (BRC) has called for an immediate cut in interest rates to revive Europe's second largest economy.

Figures show that retail sales from businesses 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 property owners tighten their belts 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 1st and 28th of May.