In message , Andy Pandy
writes

"GSV Three Minds in a Can" wrote in message
...

.. next month (and for the next years) we'll have 17.5% VAT vs 15%
VAT, which has to be worth at least another 1.5%-2% on inflation
surely?

Not necessarily, for a start loads of things are VAT free (most food,
most housing costs, second hand goods etc) or 5% VAT on fuel which
didn't change, and secondly VAT is really a tax on retailers rather
than customers, quite a lot of things didn't change in price when the
VAT rate went down. Prices are usually set based of what people are
prepared to pay rather than eg cost+margin+VAT.

VAT is only one aspect, we have a large public sector debt and are still
borrowing, that has to stop and over time the debt must be reduced. It
is probably going to hurt although who and where isn't clear yet but the
chances are most if not all of us will feel it. There is still a chance
of inflation rising and the Bank won't want to raise interest rates but
we could have stagflation. It certainly won't be an easy ride for the
next Government whoever is in power and VAT at 17.5% may be the least of
our concerns.
--
Paul Harris