SNAP ANALYSIS-Rate cut eases pain for retail but no cure

By Mark Potter and James Davey

LONDON (Reuters) - Thursday's much bigger than expected cut in interest rates will help struggling retailers, but is unlikely to save them from the toughest Christmas trading season for decades.

The 150-basis-point cut by the Bank of England -- three times the size forecast in a Reuters poll and the biggest reduction since 1992 -- provides relief for the most indebted store groups, which will see their interest payments tumble.

But it also raises concerns about the extent of the problems facing the economy and could be a double-edged sword for retailers who import goods from abroad if it adds to the downward pressure on sterling.

"This will help with confidence and could help to a certain extent with spending," said Bryan Roberts, global research director at Planet Retail.

"But there are a whole series of issues weighing on consumers at the moment -- utility bills, rising unemployment -- so I don't think it's going to get that many people out of trouble."

The FTSE All Share general retail index had already bounced almost 25 percent from its lows in late October, partly in the hope of a big rate cut, which analysts said could limit the impact on shares.

Stocks were mixed in the immediate aftermath of the cut.

Debenhams, Britain's second-biggest department stores group, was the biggest riser, leaping as much as 18 percent on relief that repayments of its almost 1 billion pounds of debts will fall.