LONDON (Reuters) – Tesco, Britain's biggest retailer, said it would freeze value added tax (VAT) on thousands of products in the new year.

The retailer pledged to keep VAT at 15 percent on items including TVs, iPods, toys and bikes, resulting in £12 million ($19.2 million) of savings for customers.

Britain cut VAT by 2.5 percent last December to cushion shoppers from the pain of the recession but will return the tax to its former rate of 17.5 percent from January 1.