VAT nightmare for everybody!!

Written before Alistair Darling's pre-budget statement, if the worst-kept secret is carried out, a reduction in British VAT to 15 pct, then there will be quite a bit of administrative angst for UK companies. This compares with the current rate of 17.5 pct. To pay for the reduction, there is talk of quite an increase later.
The British Chancellor has been caught out on his previous forecasts. He did not expect 1 pct growth for 2008 for example or recession in 2009. This shows more the perils of forecasting rather than the competence of Mr Darling. We are living in extraordinary times. Last week saw the humbling of U.S banking giant Citibank and this week is seeing the rescue.
Lower interest rates and a weaker pound might get the British economy going again but they also hit groups like pensioners, who rely on income from banks and building societies. The weaker pound has offset some of the falls in the oil price for petrol purchases.
For a government that has never built a power station, it will be interesting to see if the public works programme succeeds or not. British prime minister Gordon Brown has often spoke about public investment but when you look around in Britain it has not really happened.
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