VAT hike to 20% expected by economists
Rise in VAT rate seen by City as vital to cut deficit
Economists have warned that VAT may have to rise to 20% if the UK is going to
make significant inroads into the budget deficit.
In a bid to restore market confidence, which feels the measures outlined so
far by the new government will not do enough to tackle the debt problem,
economists expect to see a significant hike in the VAT rate.
A rise to 20% would cost each household £425 but could be introduced without
breaking Conservative or Liberal Democrat manifesto pledges, reports the
Guardian.