The Bank of England has cut interest rates again to 1% in an effort to kick-start the ailing UK economy.
According to the Bank, the weakness of the banking and financial systems globally means access to credit remains constrained – and therefore another 0.5% cut in the base rate is needed.
The British Retail Consortium (BRC) said that while the move is an understandable one, cutting rates must not be the only solution to the recession.
Business director Jane Milne said: “The key issue now is not the cost of credit – but its availability. The BRC’s Shop Price Index shows the weakening pound is feeding through to the cost of imports and some shop prices.
“The Bank of England faces a fine balancing act between further weakening sterling and attempting to revive the economy. What we need now is better access to credit and a boost to consumer confidence.”
