Marks & Spencer chairman: rate cut may boost consumer confidence

Against a background of declining sales, Marks & Spencer executive chairman Sir Stuart Rose expressed a belief that a cut in interest rates might help restore consumer confidence, reports the Financial Times.

In the UK, like-for-like food sales dropped more in the second quarter of 2008 (5.9 percent drop) than in the first quarter (4.5 per cent). General merchandise sales dropped 6.4 per cent, slightly more than the 6.2 per cent fall reported for the previous three months.

Uncertain of what Christmas would bring, Sir Stuart stated that an interest rate cut might help restore consumer confidence.

“A cut in the base rate set by the Bank of England could help people manage their debts more effectively by reducing the amount of interest charged on those debts,” said a spokesperson for debt management company Gregory Pennington.

“This could apply not just to existing debts, such as tracker and variable-rate mortgages, but to new debts, as lenders tend to look at the base rate before deciding how much interest to charge.”

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