Bira petitions the Bank of England to cut interest rates, citing stagnant consumer spending.
- The UK’s Consumer Prices Index remains at 2.2% for August, with no change from July.
- Steady inflation rates are accompanied by rising private rents that challenge disposable incomes.
- CEO Andrew Goodacre underscores the need to boost consumer confidence through reduced rates.
- The Bank of England is expected to maintain the current interest rate in the upcoming decision.
The British Independent Retailers Association (Bira) has issued an appeal to the Bank of England, emphasising the necessity of reducing interest rates to foster consumer spending. With the Bank’s rate decision imminent, Bira asserts that a rate cut is essential to energise high street activity.
Current economic indicators reveal that the Consumer Prices Index (CPI) has held steady at 2.2% for the year ending August 2024, maintaining the same level as in July. This stability in inflation figures may dampen the prospects for an interest rate cut at the upcoming Bank of England meeting.
Despite stable inflation, Bira notes that the economic atmosphere is far from tranquil. The persistent increase in private rents, which have surged by 8.4% over the past year, coupled with reduced consumer spending on non-essential retail items, paints a concerning picture for retailers.
Andrew Goodacre, CEO of Bira, articulated the association’s stance, stating, “We’re pleased to see inflation has remained static, although consumer spending on the high street for non-essential items remains depressed.” He further highlighted the significance of reducing interest rates as a catalyst for reviving consumer confidence, particularly as the retail sector approaches its peak sales period known as the ‘golden quarter.’
As the financial community keenly anticipates the Bank of England’s decision, predictions indicate that the interest rate will likely remain unchanged at 5%. Despite Bira’s advocacy for a reduction, the prevailing opinion suggests stability in interest rates will persist.
The call for an interest rate cut spotlights the ongoing complexities faced by UK independent retailers amid unchanged economic indicators.
