Further economic crisis in the UK, caused by the Jan 4 VAT increase by 2.5% to 20%, as part of a ridiculous economic policy put into place by New
Labour in 2008 and delayed by the Con-Dem coalition.
This increase is in response to the decrease in VAT to 15% during 2008-09, a disastrous gamble however, when you consider that in December 2008,
petrol was 89p a litre (unleaded) and is now around £1.24, a factor that as already pushed food prices up as hauliers are struggling with these
We are also seeing an increase in fuel duty:
And in addition to these factors, according to the following report, competition with the booming middle classes of Brazil, China, Russia and India,
and crop failures as a result of extreme weather are pushing up not only food prices but cotton, the raw cost of these commodities are yet to it the
retaillers, leading to sharp price increases over the coming quarter.
There have recently been energy price rises of around 7 - 9% depending on suppliers:
The Bank of England has forecast a further 5% rise in gas prices in the first half of 2011:
And this coming at a time when employment opportunities are low, after poor Christmas sales caused by the adverse weather, this is going to hit
retailers hard as well as consumers, causing further unemployment, and lower recruitment.
And of course we all know, higher unemployment is lower spending, which will impact all sectors, not just retail.
I see these factors contributing heavily towards a double dip recession.
I understand, as reported on the news in the UK at the time, that the US adopted some of New Labours bail out strategies in the 2008-09 period,
however I don't know in detail to what extent, but some of these factors might apply over the pond. If anyone from the US or other big economies would
like to post please?
edit on 2-1-2011 by rufusthestuntbum because: spelling