No relief in sight as interest rates remain unchanged at 5%

The BRC has said that The Bank of England's decision to leave interest rates unchanged heaps more pressure on businesses and individuals' personal finances. BRC Director General Stephen Robertson said: "As last week's election results showed the strain on personal finances is one of people's key concerns. I understand the Bank has the difficult balancing act of keeping inflation under control while sustaining the economy but financial indicators overwhelmingly point to a gloomy outlook. There's little sign yet of the rate cuts since December having much effect. With interest rate changes often taking a year to work through, the sooner the Bank cuts again, the sooner and greater the relief for hard-pressed consumers and retailers." The Bank of England said last week that the worst of the global financial crisis was over but warned that banks were in danger of self-fulfilling a financial meltdown by being over cautious.

The Bank's latest Financial Stability Report (FSR) published last week said lenders are too cautious of another credit crunch and as a result is slowing the return of confidence to the markets.