A price war broke as the two biggest supermarkets made big cuts to tempt reluctant shoppers.

Asda described its reductions as its "most aggressive price campaign ever" and promised "wave after wave after wave" of cuts in the weeks leading up to Christmas. Its move came hours after Tesco unveiled a range of reductions on big-ticket items such as children's bicycles and televisions. Asda, Sainsbury and Tesco also said they were bringing forward the 2.5 percentage point VAT reduction to this Friday. John Lewis is also cutting its prices in line with the new rate of VAT from tomorrow.

Retailers are becoming increasingly anxious about the outlook for Christmas as consumer confidence is battered. More on this story