Look closely in any high street shop window at the moment and, among the colourful signs desperately trying to entice shoppers in with promises of huge price reductions, you are likely to see a smaller, less prominent notice.

Look closely in any high street shop window at the moment and, among the colourful signs desperately trying to entice shoppers in with promises of huge price reductions, you are likely to see a smaller, less prominent notice.

It may not mention his name, but it's got Alistair Darling written all over it. It probably says something like this: "We will pass on the VAT cut at the till".

Mr Darling's promised VAT reduction came into force yesterday, shaving 2.5 percentage points off the current rate of 17.5%.

The Chancellor is crossing his fingers that the year-long cut will stimulate the economy and help stave off the worst effects of the global economic downturn.

In other words, he's pleading with us to spend, spend, spend our way out of the credit crunch. As most economic commentators have already said, it's a gamble, and a pretty expensive one at that. The move is set to cost the government - and thus the taxpayer - £12bn, and there is no guarantee that it will have any affect at all on spending patterns.

But are the shoppers answering Mr Darling's prayers by parting with their hard-earned cash? And if they do, among the many "40% off" and "25% reduction" signs, will it even be noticed?

On Glasgow's Sauchiehall Street, one of the busiest retailing hotspots in Scotland, it was perfect Christmas shopping weather yesterday - cold but sunny - and by mid-morning there were already plenty of bargain hunters pounding the pavement.

All the big retailers seemed to be passing the cut on to shoppers at the till, but had not yet changed their price tickets.

In John Lewis, which said it passed on the VAT cut to customers last week, the cash registers were ringing away like sleigh bells. Most shoppers were aware of the reduction, but simply weren't giving it much of a thought as they filled their baskets.

David and Margaret Stewart, from Howwood, Renfrewshire, said it wouldn't prompt them to spend more.

Margaret, 60, said: "The reduction isn't making any difference to our shopping patterns, but then again neither are the big sales. I just can't see how such a small cut will have any real impact.

We know what we are looking for, and we'd be buying it regardless. We're not buying products just because they are cheap. I'm more worried about what will happen next year when prices go back up."

Solicitor Jane Steel, from Balfron, was looking to buy some new clothes for the festive season.

Ironically, she said her work was extra busy at the moment because her firm deals with shops going into administration.

Yesterday, she had already bought a shirt, saving around £1.20, but wasn't persuaded by Mr Darling's economic logic.

"The VAT cut certainly hasn't encouraged me to come out and spend, although some of the big markdowns in the shops have," she said. "I just can't see the point of the reduction, I don't think it will stimulate the economy and I don't think it is worth what we will all end up paying."

Friends Mairi Beaton and Carol Buse from Taynuilt, near Oban, were more upbeat as they perused the electronic goods.

Ms Beaton said: "Every little helps, as far as I'm concerned. The reduction is small, but it may have a cumulative effect and at least the Chancellor is trying to do something to help the economy. I'll probably spend the same as I usually do this Christmas.

"To be honest I can't see much evidence of the credit crunch - the shops are packed."

Similarly, business leaders gave a mixed reaction.

Garry Clark, head of policy at Scottish Chambers of Commerce, fears the effect of the reduction will be "diluted" by retailers' own attempts to get consumers spending and says other measures to stimulate the economy could have been more effective.

"The VAT cut may struggle to have an immediate impact, despite having massive revenue implications for the government," he said. "It's such a small reduction at a time when retailers are already marking down prices considerably. In the longer term we will see an effect, but at the moment it is being diluted.

"Such fiscal investment could have been better directed, for example at a greater reduction in VAT on home repairs. This would have not only given homeowners an extra incentive to spend, but created more work for the construction industry."

Mr Clark added that, although it was too early to say how effective the cut would be, many of his members were really starting to struggle.

"Many are now finding it extremely difficult to deal with banks and are faced with rising loan and overdraft costs," he said.

"There's no doubt we need to see the cost of borrowing more come down and it's vital that this happens sooner rather than later.

"Viable, dynamic businesses are being turned away."

British Retail Consortium director general Stephen Robertson welcomed the cut and said shops were keen to pass the cut on to customers, though it was a costly process for many businesses.

"Getting the economy up and running is vital and, in this fiercely competitive climate, our members will certainly be passing this on.

"Shops will cope, but implementing a new rate in just a week was exceptionally difficult for customers and retailers at their busiest time of year.

"IT system changes, replacing shelf labels and stickering-over prices on packs will be a mammoth and costly task.

"Staff will inevitably be diverted away from serving customers. Small retailers will find all this particularly difficult to accommodate.

"The Chancellor himself says we will still be in recession at the end of 2009. That may be economically and practically too soon to reverse this."

Colin Borland, of the Federation of Small Businesses, insisted the cut could be particularly expensive for smaller retailers.

He said: "From our point of view any cut in taxes for consumers, especially at this time of year, is a good thing.

"However, obviously, for small businesses there are very practical concerns - such as having to change the prices in just a week, which can be a real burden.

"Some of our members are telling us they will end up losing out, because they paid the wholesaler 17.5% VAT on the goods, and will have to sell them on at the cheaper rate.

"However what is vital now is that we send the right message to shoppers - this is the right time to buy."