The double whammy of snow and a rise in VAT now makes the likelihood of a double-dip recession more likely. If you’re humming ‘I’m Dreaming of a White Christmas’, stop now!
Last weekend, usually the busiest weekend of the year, has been a disaster for many retailers. John Lewis reported their takings on Saturday were down by £5 million compared to the same time last year.
2011 was never going to be a very exciting year in terms of growth and today the CBI gave us all a bit of Christmas cheer by downgrading their first quarter forecast from 0.3% to 0.2%…wow! They based the change on higher than expected inflation, snow and ice were not included. Add the perishing duo to the equation and the chances of there being any growth in the last quarter of 2010 or the first quarter of 2011 are remote. Double dip here we come!
So, what to do? Well, there is one thing Osborne can do and that is to delay the introduction of the VAT rise until 4th February. Introducing it before the January sales was a totally dumbass thing to do anyway and demonstrated the Chancellor’s total lack of commercial awareness. But a delay would be very helpful.
Delaying the introduction would allow retailers to clear their stocks, restore some of their lost profits and keep production lines moving: might also delay a few thousand job losses too.
Is a flash of compassionate conservatism too much to hope for from the snowbound Chancellor sitting twiddling his thumbs in New York? A small gesture to brighten this blighted Christmas possible? I don’t hold out much hope. Pity.