Bira (British Independent Retailers Association), which represents over 6,000 independent retail businesses across the UK, has warned that they face troubled times ahead despite today's Bank of England interest rate cut to 4.5 per cent, as the Bank halves its growth forecast for 2025 to just 0.75 per cent.
"The reduction in interest rates was expected and is welcome news for the retail sector," said Bira CEO Andrew Goodacre. "We have consistently maintained that rates have unnecessarily remained high for longer than required, and we anticipate this reduction will help boost consumer confidence."
However, Bira expressed serious concerns regarding the Bank's revised economic growth projections. The forecast has been halved from the previous estimate of 1.5 per cent to just 0.75 per cent for 2025, despite recent government initiatives.
Mr Goodacre said: "The Bank's economic growth outlook is deeply worrying. Independent retailers are still grappling with the triple impact of rising costs from last year's budget. While the Bank of England is taking steps to stimulate growth through rate cuts, more immediate action is needed from the government to support high street businesses."
Andrew Goodacre
The Bank's decision comes amid rising inflation expectations, with projections showing inflation could reach 3.7 per cent in the third quarter of this year. Additionally, unemployment is forecast to increase to 4.8 per cent over the next year, highlighting the challenging economic environment facing retailers.
Bira emphasises that while long-term infrastructure projects are important, immediate support for high street businesses is crucial.
"Long-term projects like the third runway at Heathrow will do little to address the immediate challenges facing high street retailers this year. We need to see concrete government plans that will deliver immediate support to our sector," added Goodacre.
