The Bank of England has held interest rates at 5 per cent, as retailers continue to feel the threat of the first recession in almost 20 years.
The International Monetary Fund today slashed its growth forecasts for the UK economy, warning that a recession was not out of the question. It said the UK economy would grow by just 1.4 per cent this year and 1.1 per cent next year – the slowest rate of growth since 1992.
According to figures from the British Retail Consortium (BRC), consumers were hit by a 9.5 per cent jump in food prices in the year to July. However, the rate of price inflation slowed for non-food items, up 0.1 per cent in July compared with 0.2 per cent in June.
Overall, shop price inflation was 3.2 per cent in July, according to the BRC-Nielsen Shop Price Index.
BRC director-general Stephen Robertson said: “With a difficult balancing act to achieve between keeping the inflationary threat at bay while also stimulating the economy in the midst of the current slowdown, this is the right decision for now.
“At our quarterly meetings with the Bank of England, the BRC and major retailers are saying weakening sales and record low consumer confidence show the downturn is deepening. To avoid turning the slowdown into a slump, as soon as conditions allow, the bank’s next rate move should be down.”
No comments yet