BHF Group has welcomed parts of the Chancellor’s pre-Budget statement but says the temporary VAT reduction will draw attention away from the long-term changes looming for National Insurance rates.
“It’s good to see the government taking serious action to try to avert the oncoming crisis,” said managing director Alan Hawkins, “but it’s not clear that a 2% reduction in prices will even be noticeable amid heavy seasonal discounting.
“In 13 months’ time after another Christmas, retailers will be left with the headache of re-pricing all over again in the middle of the January sales – and policy makers will have the headache of a sudden 2% jump in inflation.
“Let’s hope that by the time it comes to pass the economy really is returning to growth.”
He added: “The increases to both employees’ and employers’ National Insurance rates, on the other hand, will affect everybody, will be significant and will be