UK interest rates have been cut three times since December 2007.

The Bank of England has today cut interest rates by another quarter point to 5% – a move that has been welcomed by the British Retail Consortium (BRC).

The cut is the third made by the Bank of England since December 2007, as fears amount over the credit crunch and an impending recession.

BRC Director General Stephen Robertson commented on the move: “This interest rate cut will give customers and retailers a much needed boost. With consumer confidence at its lowest level for 15 years, customers are reining in their spending and every prudent retailer is looking at cost-cutting more seriously than for some time.

“The Bank is understandably concerned about inflationary risks but these are mainly coming from rising world energy and commodity prices which won’t be affected by keeping rates high. Retailers are absorbing many of the input cost increases and intense retail competition means that non-food prices are actually falling, while food price inflation is slowing.

The BRC has called for further cuts to be made sooner rather later, citing interest rate changes taking months to have any effect.

By Natasha Piscitelli