The UK’s retailers broadly welcomed the chancellor’s cut in the rate of value-added tax on Monday but warned that the reduction was difficult to implement and would be eclipsed by clearance sales in the next few weeks.

With many retailers already cutting prices by about 20 per cent to try to stimulate spending in the run up to Christmas, the cut from 17.5 per cent to 15 per cent in the rate of VAT comes into force on December 1 and lasts until the end of next year.