The British Chamber of Commerce (BCC) has called for a half per cent cut in rates when the Bank's Monetary Policy Committee meets in early December.

Leading members of the BCC believe that a further cut in interest rates is needed before Christmas to boost the retailing industry, which has been hit by a downturn in consumer demand over the past few months.

The BCC also wants a cut in rates to alleviate some of the problems being encountered by British exporters.

Sales in overseas markets have crashed as the strong pound has made British goods relatively more expensive, compared to those produced by their overseas rivals.

Director General of the BCC, Chris Humphries, said: "A half per cent cut in rates at the Bank's December meeting will send a firm but positive signal to the markets, ease pressure on the hard hit manufacturing industry and help pick up flagging demand in the retail sector ahead of the Christmas period.

"With this week's trade figures showing the worst deficit on record, and economic forecasts for 1999 growing only in their pessimism, now is the time for the Bank to be bold. A further half per cent cut now is essential to keep recession off the agenda in 1999."

Falling rates

The BCC's call comes soon after a similar demand from the Confederation of British Industry.

Interest rates were cut earlier this month by half a per cent to 6.75% and analysts believe they are likely to fall further over the coming months as the UK economy heads for a marked slowdown.