Interest rate cut means little to shoppers

Jessica Price Brown

• Increase image
• View all images

Trimming interest rates by quarter of a per cent will make little different to the cash in consumer pockets this Christmas.  

Nor will the interest rate cut have any real impact on consumer borrowing so, as predicted, this Christmas will be a lean one for many. One positive is that the cut yesterday signals rates could at least be starting to move in the right direction for consumers but the absolute best retailers can hope for is a few headlines that might spark a bit of a feel-good factor. 

Meanwhile high street retailers are reporting very different experiences about spending methods this Christmas. One major department store told me that most of its shoppers are splashing out for Christmas on their credit cards - a worrying prospect for next spring's trade - but other high street multiples are reporting that cash and debit card spending are holding up while credit spending is way behind because of consumer caution.

Massively differing tales like these are commonplace this Christmas. As usual volatile trading patterns are defining winners and losers with niche operators and those with online offers seemingly coming out on top. If however, you're in a highly competitive market like men's suiting then I don't imagine you're getting much sleep at night.

Meanwhile this weekend will see another secret Sale bonanza on the high street. Debenhams has a new type of mega-event and is offering 10% of all goods for a four-day period, while House of Fraser has sent 20% off vouchers out by email just one week after it held its two-day Brand Spectacular event. Ok we're not quite at the red and white banner stage but there is widespread discounting already out there but extra incentives like there seems to be the only way to boost footfall at the moment.