Research amongst UK citizens in the build up to today’s emergency budget shows that the most worrying potential aspect is a raise in VAT.
Online price comparers uSwitch.com found that the VAT increase, expected to rise from 17.5 percent up to 20 percent, is the main worry for 60 of the consumers quizzed. Rising interest rates were also a concern, with 42 percent citing that as a primary issue, 37 percent of people feared a rise in National Insurance and 33 percent fretted over frozen pay-packets.
Findings from the survey showed that 45 percent of consumers had a general feeling of malaise with regards to their personal finances, 49 percent felt that they were doing better financially before, 18 percent were funding their lives through loans and 14 percent were having difficulty repaying their existing debt.
Director of consumer policy at uSwitch.com, Ann Robinson said: “While tomorrow's Budget may be designed to tackle the national debt, consumers are concerned about what it will mean for them. The biggest worry is the potential rise in VAT – a cause of concern for six out of 10 consumers, many of whom are now considering drastically altering their spending plans. Worryingly, this doesn't just mean cutting out luxuries; over a quarter (26 percent) may be forced to cut back on necessities such as food.”
The pessimism remained as a separate study, by market researchers YouGov and Markit, found that 44 percent of the public foresaw their personal financial situation worsening in the next year, compared to just 22 percent thinking it would improve in the coming year. One of Markit’s resident economists, Tim Moore, said: “With the forthcoming emergency Budget bringing austerity measures closer into focus, households are becoming increasingly concerned about the potential headwinds threatening their finances. The survey shows the greatest degree of pessimism since the recession was in full swing early last year.”