Am I the only one who has looked at the latest VAT cut of 2.5% and thought wow that's nice but it will hurt us more than it will actually give us.
2.5% is a very small cut, sure if you are buying a car or any other large purchase then it can amount to something. But lets face it there are few people making these big purchases and the ones that are, can obviously afford the extra 2.5%. The majority of us will benefit when we do our shopping on the high street but only to the tune of £2.50 for every £100.00 we actually spend. Hey! there are some reward cards giving you better savings than that.
So the fact is I don't think the masses of us will not really notice the drop as consumers. Some businesses will notice the drop but again small change. What everyone will really notice is the hike in taxes that will have to take place in the future to pay for it and that is what really scares me.
I know something had to be done about the recession and I have to be honest I don't really know what is the silver bullet for the economy that we are going into. But I do know that borrowing money when as a country we are already in the greatest debt we have ever been in is far from the most optimum solution.
The problem that I see is governments unfortunately do more for us on the basis of votes than they do as good financial and fiscal planners and for that reason I really believe we will all regret this tax cut, but what a surprise, it will probably be after the next general election!!!