Just a quick post to point out the results of a survey the Times Online did following the pre-Budget report.
Probably the most interesting question posed asked whether people would be encouraged to spend more money following the cut to VAT.
The result? 95% would not.
This backs up what many commentators predicted at the time – that the cut would have little effect on consumers’ spending habits. Of course, what people answer in surveys, and what they do when they find themselves with 2.5% extra cash in their pockets is another thing.
In all 2,800 readers responded to their questions.
I’m not in the slightest surprised. A change to VAT is possibly the worst way of “stimulating” the economy from my point of view.
The difference that a discount of 2.1% is going to make is negligible, considering the number of products that make up the bulk of the average shopping basket.
An Aussie/US style rebate would at least give the temptation to spend, even if it was saved by some people.