Darling Destroys Debt

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The mix of Pre Budget Report decisions has made me wonder. Do the Government want us to save, lend, spend?

The decrease in VAT was put into place to increase public spending, yet all its done is ease the pressure. Darling is saying he wants to decrease public debts, but then lowers interest rates, which even tempts me to go and get a loan and invest it elsewhere

Darling Destroys Debt

When the last raven leaves the Tower of London and it is time to engrave an epitaph on the nation’s headstone, there is no doubt what it will say: “Britain: the country that liked to spend now and pay later.”

Today’s pre-budget report is all about the government’s attempt to exploit this deep-rooted character trait. Assuming the nudges and winks from Whitehall are correct, VAT will be cut to entice consumers back into the shops for a pre-Christmas spending splurge. The theory is that behaviour will be driven more by lower prices today than by the threat of higher taxes at some point in the future. On past form, that looks a reasonable bet.