Unseasonably suicidal : CITY AND BUSINESS

Every December, it's the same story. Retailers start to panic that people will abandon 2,000 years of tradition and not celebrate Christmas with a spending spree. You can understand the anxiety. The stores stock up to the gunnels with merchandise and canbe left looking very sick if it hasn't been bought by 24 December. For many, Christmas generates the bulk of annual profits.

Clothing retailers are already unseasonally depressed: the long spate of mild weather means the heavy overcoats and woolly jumpers are piling up unsold. As one retailer put it to me, the hats, gloves and scarves departments are suicidal. Anecdotally, November was a disappointment for the high street. Next week, the official retail sales figures and the CBI distributive trades survey should shed more light on the subject.

So last week was a bad time for Kenneth Clarke to drop his bombshell decision to raise interest rates. The half-point rise to 6.25 per cent is equivalent to £20 a month on a £50,000 mortgage if lenders pass on the full increase.

Retailers are terrified the increase will damp consumer confidence, which is already no better than lukewarm, and they have been berating the Chancellor accordingly. It is all beginning to sound a little bit hysterical.

If retailers were just one tenth as euphoric about interest rates cuts as they are gloomy about interest rate rises, they might be believed more. As sure as eggs is eggs, the Christmas boom will come yet again this year.