Christmas shoppers in Central London welcomed today’s cut in VAT but shrugged off hopes that Alistair Darling’s Pre-Budget Report would reinvigorate the British High Street.

“It will help me,” said Joan Rainford, 52, a teacher who was buying presents in the rain on a downbeat Tottenham Court Road. “It’s better than nothing but I’ve already told my daughter I’m going for cheaper clothes. She likes designer labels but that is out of the question this year.”

Gaudy sale signs accompanied the festive lights and Christmas decorations today as retailers were forced to promise rare discounts during their busiest period of the year.

Kirstie Taylor, 24, who works in a furniture shop, said the reduction in VAT to 15 per cent was good news and it could help to kick start the slow spending amid the current economic gloom.

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“I think it might encourage people to shop,” she said. “But I want to see more done to help people with loans or in debt.”

A Polish investment banker was less positive. “I think twice now before spending any money,” said Yarek Kwasniak, 26. “I’m not sure that the price cut will make much difference but maybe if you are moving into a new house or spending a lot of money on Christmas you would make decent savings.”

The Chancellor of the Exchequer hopes that reducing the rate of VAT will encourage British consumers to keep spending and ease the threat of a prolonged period of recession.

Paul Mason, 54, an educational advisor, said he would not suddenly be rushing to spend his money. “It’s not enough to make me change my habits. I don’t think anything they do will make a difference,” he said. “The Government has jumped into action but I’m not sure whether it’s really going to save the economy.”

Mike Allan, 70, who said he was window-shopping today because he could not afford to buy anything on his meagre pension, was nonetheless pleased by Mr Darling’s intervention.

“I’m glad the Government is being proactive,” he said. “But I still won’t be buying much. It’s a long-term problem and it’s going to take a long time to solve.”

Jeet Guha, 35, who owns an electronics shop, was not convinced that a reduction in VAT would help his revenues. He said: “I have already paid 17.5 per cent VAT on my stock so I’m not sure how the rate cut will help me.

“It may encourage shoppers at the top end but for most of my sales only a few pounds would be saved. I don’t think it will make a massive difference.

“The Government had to do something, confidence is down and business is quiet today but I’m expecting Christmas to be average as we feel that the downturn is not as bad as it is made out to be.”

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