In message , Mark
writes
On Wed, 20 Jan 2010 23:16:24 +0000, Paul Harris

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.

I'm sure the BoE took the VAT rise into consideration in their
forecast. That's probably why they say it will rise and then fall
later in the year.

If they are comparing month to month (Feb to Feb and March to March
etc.) then the VAT increase will be there every month throughout the
year rather than affecting just the first half.
--
Paul Harris