£1 trillion and counting!
Today for many people will seem like the morning after the night before when reality starts to hit home and the short-term benefits of the pre-budget report start to fade away and the medium to long-term implications become ever clearer. The fact that the UK will be over £1 trillion in debt after three years is a disaster for each and every taxpayer in the UK.
The short-term benefits of various tax incentives announced yesterday fade into insignificance compared to the massive increase in taxation which is sure to occur after the next general election. However, on the positive side each and every person in the UK needs to concentrate on the short-term and the incentive to go out and support the economy in these troubled times. Whether people will use the extra pounds in their pockets to spend or save or even reduce there financial liabilities remains to be seen but the future is by no means clear at the moment.
The problem for the government is that nothing is certain as the actions of consumers and taxpayers in the UK have been historically difficult to predict. The run-up to Christmas is vital for the high-street although there are concerns that any benefit from the VAT reduction may not be felt in full until into the New Year.
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