Sent from my -BlackBerry Phone-
-----Original Message-----
From: MeLinda MeLisa <[email protected]>
Sender: [email protected]
Date: Sat, 8 Jan 2011 01:53:03
To: <[email protected]>
Reply-To: [email protected]
Subject: [StockForex] VAT rise could push UK economy into double dip
VAT rise could push UK economy into double dip, says leading economist
Friday, January 07, 2011 - Source: http://marketpin.blogspot.com/
Chancellor George Osborne, in a recent interview, has dashed any hopes
of the impending VAT rate rise being revoked as soon as the economy
picks back up, saying that it is a ‘structural' change to the tax
system.
The interview is reproduced in part here on The Spectator blog ,
Coffee House and it immediately provoked a response from the
investment community.
John commenting on The Daily Mail's site says: "Well you heard it from
the horses mouth. Vat, the only tax that affects ALL students,
pensioners and families will stay up, but the 50p tax that only
affects the wealthiest will come down...as soon as the government
coffers are fuller. Translated from Tory speak: "you all have too much
money, unless you are loaded and then you don`t have enough"
Double Dip trigger?
The VAT rate rise has been controversial ever since it was announced.
Back in October Simon Ward, chief economist at Henderson Global
Investors warned that raising the VAT rate in January could push the
UK economy into a double dip recession. We reported that here .
Only time will tell whether the government should have heeded his
warning to postpone the rate rise.
Why is VAT going up?
The reasons behind the rate hike are simple. The Office of Budget
Responsibility has revealed that the VAT rise due to come into force
in January is intnded to reduce the UK's gross domestic product by
0.3% in 2011-12.
As Tom Clougherty, executive Director of the Adam Smith Institute,
writing in The Yorkshire Post puts it: "In plain English, that means
raising VAT from 17.5% to 20% will destroy some £5 billion of economic
activity in the next tax year. The reason for this is simple: raising
VAT will dent consumer confidence and discourage spending; fewer goods
will be sold and lower profits will be recorded."
What the rise will mean to consumers
A report from data management firm Acxiom has found the increase will
cost the average household £225 a year - soaring to £448 for more
well-off families, as reported here on Beatthatquote.com.
DennisCooper commenting on the BMW 5 Series owners forum is sanguine
about the rate hike: "The VAT increase is a measure which will help
the UK slowly recover from it's massive hangover from the crazy borrow
more & spend more days.
"On a national level, that's what the last government did, and on a
banking and businesses level it was done and of course by individual
consumers as well.
"Everyone in reality, who spends more than they bring in will
eventually be brought back down to earth with a bump. You have to pay
back what you borrow!"
Effects on business ?
For businesses, the response has been mixed. According to an Institute
of Chartered Accountants in England and Wales (ICAEW) poll, businesses
are split about how they will deal with the increase in VAT. It found
that six out of every 10 businesses believe that the VAT hike will
affect their organisation's cash flow to some extent.
Nearly one tenth think cash flow will be affected to a significant
degree, as reported to Bytestart.co.uk , a site for small business
owners.
The British Retail Consortium has calculated that the VAT rate rise
will cost 30,000 jobs next year, and a total of 163,000 jobs by the
end of 2014.
David B Smith, a visiting professor at the University of Derby, has
also run the VAT rise through his Beacon Economic Forecasting model,
and found that the 20% rate will increase the number of people
claiming unemployment benefits by 236,000 over the next 10 years.
As the Adam Smith Institute's Clougherty, says: "That's bad enough on
its own to raise questions about the Government's plans. Does it
really make sense to be willfully damaging the private sector economy,
when the recovery is still so fragile?
Source: http://marketpin.blogspot.com/
------------------------------------
## StockForex ##
_________________
::Forum:: All about Forex and Stock Trading ; all currency pairs.
All Major World Indices, Asian Stock Index. and Individual/single stock.
We're not goin' anywhere
Well, it's all right here. Enjoy it !! :)
_________________
http://finance.groups.yahoo.com/group/StockForex
Yahoo! Groups Links
------------------------------------
Kunjungi situs http://www.info-saham.com untuk informasi seputar saham.
SEMUA POSTING DI MILIS INI TANGGUNG JAWAB PENGIRIM EMAIL DAN BUKAN ADMIN MILIS.
SEMUA POSTING DI MILIS INI BUKAN UNTUK MENGAJAK MEMBELI ATAU MENJUAL EFEK.
SETIAP KEPUTUSAN INVESTASI MENJADI TANGGUNG JAWAB PIHAK PEMILIK INVESTASI ATAU
PEMILIK MODAL.
[email protected] untuk berhenti dari milis saham
[email protected] untuk bergabung ke milis saham
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/saham/
<*> Your email settings:
Individual Email | Traditional
<*> To change settings online go to:
http://groups.yahoo.com/group/saham/join
(Yahoo! ID required)
<*> To change settings via email:
[email protected]
[email protected]
<*> To unsubscribe from this group, send an email to:
[email protected]
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
