Inflation could rise to as much as 4.2 percent, as the VAT increase takes effect, City economists have warned. Consumer price inflation reached 3.7 percent in December. The rate of VAT increased from 17.5 percent to 20 percent on January 3 2011.
The change of inflation will largely be down to the extent to which retailers have passed on the VAT increase to consumers. Some retailers, such as John Lewis, did not pass on the higher rate of VAT when it first came in to effect.
The Governor of the Bank of England, Mervyn King, warned that families will face the worst financial position since the 1920’s and has suggested that inflation could reach 5 percent at some stage during the year.
Union leaders are likely to argue that workers should receive pay rises in line with the hikes in the cost of living.
Deputy general of the TUC Frances O’ Grady said: Let’s be blunt, 2011 is going to be a horrible year with cuts, job losses, price rises and pressure on pay and pensions, and thousands more ordinary working families will be pushed into the red as a result.”
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Ricky worked as an Investigator in the Inland Revenue for over 20 years before founding Steedman & Company in 1987, giving him the experience and knowledge that enabled him to help so many clients over the years.
His appearance on a Channel 4 television programme about the inside workings of Revenue and Customs was watched by 4.1m which sealed his status as one of the most highly respected tax consultants to ever work in Scotland.
Ricky led all tax investigation and COP 9 cases, using his extensive knowledge to help people reach a positive resolution to their situation.
Ricky passed away suddenly and unexpectedly in June 2022 after leaving his indelible mark on the company he founded and headed for over 35 years.