Retailers have urged the Bank of England to cut interest rates dramatically today after a drop in food price inflation.
Director general at the British Retail Consortium (BRC) Stephen Robertson said a bold cut in rates would be a “great Christmas present” for consumers being hit by the economic downturn.
He said the Bank of England should cut the base rate of interest by a full percentage point, and also urged banks to pass on any cuts to consumers.
Pressure on the central bank mounted after yesterday’s BRC and Nielsen food inflation figures were released.
Annual food price inflation dipped from 9.1% last month to 7.5% in October, while month-on-month inflation was down by 0.1%.
“The escalation of the economic slowdown justifies, in our view, a full percentage point off interest rates at tomorrow’s meeting,” added Deutsche Bank economist George Buckley.
Last month, the Bank surprisingly dropped rates by half a percentage point a day early following the turmoil in the world markets.
