The Bank of England has held the UK interest rate at 5 per cent as spiralling inflation outweighs concerns over slowing economic growth.

The move, which was widely expected, will bring little relief for retailers that are being hit as consumers rein in their spending as they face rising prices of food, petrol and utilities as well as falling property values.

Yesterday, a report from PricewaterhouseCoopers said that consumer spending growth will slow to 0.5 per cent next year.

It also revealed that the chances of the UK economy now falling into a recession have risen 30 per cent in recent months.

A tranche of building companies have slashed thousands of jobs in recent weeks and a number of retailers have hit the buffers including Ilva, ScS and ProCook.

Inflation is at 3.3 per cent, above the Bank of England’s 2 per cent target.

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