The British Independent Retailers Association (Bira) is urging the Bank of England to cut interest rates to boost consumer spending.
- Inflation has remained steady, with the Consumer Prices Index (CPI) rising by 2.2% over the year to August 2024.
- Private rents have surged by 8.4%, pressuring consumers’ disposable income despite unchanged inflation rates.
- Bira’s CEO highlights the need for restored consumer confidence to revitalise high street spending.
- The Bank of England is expected to maintain interest rates at 5%, pending tomorrow’s decision.
The British Independent Retailers Association (Bira) is calling on the Bank of England to decrease interest rates in an effort to stimulate consumer expenditure. This appeal comes amid unchanged inflation figures, with the Consumer Prices Index (CPI) showing a 2.2% rise for the year ending in August 2024 compared to July.
Despite stable inflation, households are feeling the pinch from an 8.4% increase in private rents across the UK. This escalation in living costs for renters is likely to further constrain their available income for discretionary spending.
Andrew Goodacre, CEO of Bira, expressed satisfaction with static inflation but pointed out the persisting decline in consumer spending on high streets for non-essential goods. “With inflation not rising, we hope the Bank of England will reduce interest rates to boost consumer confidence,” he stated.
Goodacre emphasised that lowering interest rates is pivotal to reinstating consumer confidence and encouraging shoppers back to high streets, especially as the retail sector approaches the lucrative “golden quarter” of the year.
Indications ahead of the Bank of England’s meeting suggest that interest rates will likely remain at 5%. The decision, due tomorrow, is being closely watched by retail stakeholders concerned about sustaining consumer spending.
The upcoming interest rate decision by the Bank of England holds significant implications for consumer confidence and retail expenditure.
