Government set to cut VAT; time to throw a party?
So we're all strapped into a rocketship called DOOM on a course set for hell, but at least we're being served tea and biscuits on the way.
With our belts so tight as to cause diaphragmatic rupturing*, the Government and retailers are playing tag-team wrestling with consumers in a bid to re-ignite the economy and tease us into parting with our cash. High street stores are already holding mid-season sales; Marks & Spencer lured in shoppers with their one-day 20% off event and Debenhams offered up to 25% off everything over three days.
Meanwhile the 1.5% cut in interest rates earlier this month means plenty of us will breathe easier in December when our monthly mortgage payments drop. And later today, chancellor Alistair Darling is expected to announce a reduction in VAT of 2.5%, from 17.5% to 15%.
While the newspapers seem to be doing backflips over the news, as if folk will throw street parties and indulge in a little free lovin', it's worth remembering that it won't do anything to cut the cost of essentials; food and children's clothes are already zero rated so carry no VAT at all, as are books, newspapers and magazines. Household fuel and petrol are charged at a reduced rate of 5% meaning there'll be no reduction in their cost either. Balls.
You'll save some money on your television subscriptions, your landline and broadband costs, mobile phone bills and any other new goods you buy, but to make any real savings on your Christmas shopping you'll have to spend a decent wedge; a 2.5% reduction in VAT means a saving of just £25 in every £1,000. Don't break out the bunting just yet.
* entirely made-up ailment