The director-general of the British Retail Consortium has urged the Bank of England to cut interest rates by up to half a percentage point this week or face a possible wave of job cuts across the high street.

Stephen Robertson, who took over at the BRC two months ago, said that retailers were coming under intense pressure to shelve recruitment plans and training schemes, given the spending slowdown since the new year.

His comments came as Grant Thornton, the accountancy firm, issued figures showing how bad the start to the year was for retailers.

Mr Robertson said: “The Bank of England should take a quarter-point off rates, and it’s even getting to the stage where a half-point is not unreasonable. If the economy slows down dramatically you have got to realise that one in nine people employed in the UK is employed in retail.

“There’s lots of talk about job cuts at the moment. Every prudent retailer is looking at cost-cutting more seriously than they have done for some time.”

He added: “A healthy economy is a happy economy and retail sits right at the pivot of that. To boost confidence, we do need to see the gentle stimulus of a rate cut.”

Grant Thornton’s survey showed that of all the retailers on the stock market, 23 per cent issued negative trading statements in the first quarter of the year – more than double the 10 per cent of a year ago.

There were also eight profit warnings, with most coming from “big ticket” chains such as Land of Leather and ScS Upholstery, the furniture retailers.

David Bush, head of Grant Thornton’s retail services team, said that the present mood on the high street was one of “nervousness”. He said: “The restriction in unsecured bank lending to consumers and the slowing of house prices has had a greater impact on retail spending than the cut in interest rates since Christmas.

“This research shows that the first three months of 2008 have got off to a shaky start and that for the immediate future there is no short-term end to the consumer spending downturn.” Interest rates have been cut twice since December to 5.25 per cent. A half-point cut to 4.75 per cent this Thursday would take the cost of borrowing to its lowest level since August 2006.

Sir Stuart Rose, the Marks & Spencer chief executive, last Friday repeated his fears that the present slowdown could last until 2010, given the mounting pressure on consumers’ wallets. He said: “I’m normally a glass-half-full person but in the last three to four months, I’ve felt half-empty. I am worried about how long this slowdown might last for and the effects on the consumer.

“If you ask M&S, Tesco and Transco to tell you what is happening with customers, they will say they do not feel inflation is only 2.3 per cent.

“They will tell you they feel it’s a great deal higher given the rising bills coming in and the impact on disposable income. We are planning in our business for a sustained period of difficult trading.”

Shopkeepers sing the blues

January 3 John Browett, new chief executive of DSG International, says it may take years to revive the Currys and PC World business after a stark profit warning. Shares in DSG drop 27 per cent to a 12-year low

January 4 Nearly half of Land of Leather's market value is lost as the UK's second-biggest sofa specialist says that profits will fall “significantly below” market expectations

January 9 Nearly £1.6 billion wiped off the value of Marks & Spencer. It reports its worst Christmas for three years and gives warning of a “serious softening” on the high street

March 12 Stephen Marks, founder of French Connection, says the group's performance is “not good enough” as profits plunge 22.5 per cent. He writes off the prospects of a revival on the high street this year

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