Officials at the Office of Fair Trading surprised fashion retailers with a warning over their co-ordinated VAT cuts, which passed on the full 2.5% cut outlined in the pre-budget report. Leading figures in the retail industry, including Sir Philip Green and Sir Stuart Rose, said in a statement last month that the co-operation over VAT reductions was intended to help customers. But the OFT sent letters to fashion retailers warning that they heed competition law, The Times reports. It is understood that the OFT was concerned that the joint front put forward by retailers bordered on collusive behaviour, but will not be taking any further action. Retail chiefs are said to be angered by the warning, which is believed by them to be an unnecessary action.