VAT cut on the horizon? (UK)

In an attempt to breathe life back into the UK economy, there is growing speculation that Alistair Darling, chancellor of the exchequer, may announce tomorrow a cut in VAT.  Sky News reports that The Sunday Telegraph and Sunday Mirror are claiming there may be a 2.5% decrease, bringing the rate to 15%.  This measure is expected to be announced in Darling’s pre-budget report. 

If the suggested measure goes ahead, the average UK household should benefit from lower prices on some day to day items, relieving pressures on the pocket, and allowing for more spending accross the board, thus infiltrating the UK economy with more money.  However, there are sure to be some analysts that will deem this move another in a series aimed at garnering positive media attention for the government without having a significant impact on what is now laregely considered to be a full scale recession.  Ultimately, they need to at least look like they know what they’re doing.  Don’t they?


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