Has the reduction in VAT made a difference?
The government's decision to slash VAT from 17.5% to 15% only a couple of weeks ago had been put forward as the saviour of the high street in the run-up to Christmas. However, we have seen the beginning of a price war on the high street which was prompted by the 50% reduction sale at ailing retailer Woolworths. The likes of Tesco are now getting in on the act with reductions of up to 50% on a number of their lines and the likes of Morrisons, Sainsbury and Asda should follow.
This has effectively overshadowed the 2.5% VAT cut and rendered it meaningless in the overall picture although the government may well take some credit if the short-term retail figures show an improvement. The truth is that the UK retail sector is desperate for Christmas to be a success although with more and more retailers slashing prices up to two weeks before Christmas this does not leave an awful lot of scope as we near the festive period.
Surprisingly, the amount of money being spent on the high street appears to have remained steady compared to last year although there are signs of a shift from the off-line arena to the online market.
Share this..
Related stories
CML report significant rise in mortgage application fraud
The Council of Mortgage Lenders (CML) has today confirmed a significant increase in mortgage application fraud across the UK. Even though the CML admits there are no definitive figures with regards to mortgage application fraud, anecdotal evidence from their members has confirmed their worst fears. The situation has become much worse since the onset of UK recession amid signs that more and more pe...
Read MoreAre bonuses a vital part of the UK banking sector?
After Stephen Hester commented on the fact that Royal Bank of Scotland stands to lose some of the top talent in the UK financial sector because of pay restrictions and bonus issues, many are now asking whether bonuses are indeed a vital element of the UK banking sector. While the UK government would have you believe that all bankers in the UK are "the devil in disguise" the truth is that the UK...
Read MoreNorthern Rocks change of strategy yet again
Despite spending millions of pounds of UK taxpayer's money literally paying mortgage customers to remortgage elsewhere, in the aftermath of the nationalisation of the business, there has been a significant about turn over the last few days. For the first time since 2007 the Northern Rock is now offering mortgage deals to existing customers with sweeteners such as cheaper rates and cheaper set-up f...
Read MorePres Obama likens oil spill to 9/11
In a comment which is certain to grab the headlines and prove very controversial, Pres Obama has likened the oil spill in the Gulf of Mexico to the 9/11 atrocities. The families of victims from the 9/11 atrocities are outraged at the comparison and yet again, despite comments to David Cameron at the weekend, Pres Obama continues to wage a war of words against BP. The company has now lost around...
Read MoreCan You Help Us Darling?
In a move which has never been seen before in the City, Alistair Darling will hold a meeting with the Association of British Insurers (ABI), commonly regarded as the most influential lobby group in the financial world. The move seems to be an attempt by the Treasury to repair bridges which have been damaged of late and put the government back into the ‘good books’ o...
Read More