Following UK Treasury reduction of the Value Added Tax from 17.5% to 15%, coming into effect on Monday, to jump-start a moribund economy, high-street retailers are scrambling to do just that if today's announcements of a massive price war are anything to go by.

Leading retailers are anxious to pass the VAT reduction to consumers three days early. DSG, the owner of Currys, Britain's biggest electrical goods retailer, was the first to cut prices. Tesco, Sainsbury's and Asda, the supermarkets, were also quick off the mark — with all announcing aggressive price cuts at the same time.

Asda's chief executive pledged “thousands” more price cuts from last night – promising to sell all televisions and DVD players VAT-free tomorrow, Saturday and Sunday.

Apart from passing on the 2.5% VAT reduction across the board, Tesco said that it would also reduce prices on 1,000 products by up to 50%.

Sainsbury's says the rate cut will be in addition to discounts that have already been applied to everything from TVs and toasters to DVDs and laptops.

The Times reports that Marks & Spencer is to hold at least one more day, and maybe two more days, in which all stock in its stores is reduced by 20%.

Consumers were already in cheery mood: Mamma Mia! has become the UK's fastest-selling DVD of all time after a day's trading. Universal Pictures International Entertainment said that the title posted unit sales of just short of 1.7 million, beating flat out its nearest rival Titanic, which sold 1.1 million units on its first day on sale back in 1998.

Story filed 27.11.08