Is a cut in interest rates in the offing?
Bank of England governor Mervyn King (pictured) acknowledged yesterday that the uncertainty over the strength of spending could have an impact on future growth in the UK economy. His comments indicate that the Bank seems to have heeded retailers' calls for a tighter rein on interest rate hikes.
The bank said it was leaving interest rates at 4.75 per cent on Monday, the ninth successive month at that rate. Today's Times reveals that the bank is likely to cut rates nest month as spending continues to slow.
The next day, the British Retail Consortium (BRC) issued the heaviest warning of a high street slump so far this year, by saying retail sales had dropped to the lowest level in 10 years.
The BRC has been a vocal advocate of the lowering of interest rates, even though its director-general, Kevin Hawkins, has said that lower interest rates alone would not provide the uplift retailers need.
King is understood to blame the Labour Government's policies on taxation and house prices as a contributory factor to the consumer slowdown.
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