[RE: High inflation is denting recovery: The Bank of England must act now, Thursday]
Andrew Sentance makes some very good points. Quantitative easing (QE) has resulted in inflation. As an importer of wine, buying mainly in euros, weaker sterling affects my prices directly and we have no choice but to pass these on to the consumer. However, I don’t see what the Bank of England can necessarily do about this. QE can’t just disappear . It’s a different issue for George Osborne, however, Firstly, as a retailer the most damaging policy implemented by Osborne was the increase in VAT. This has had a hugely damaging effect on my business. We are now paying less VAT to HMRC (due to the damaging effect on our retail sales) than we were prior to him enacting the rate rise. The VAT lost as a result of the fall in revenue has exceeded the extra 2.5 per cent collected per sale. The intention of the policy, I presume, was to collect more tax. But the result is that my company is paying less tax. And other policies have made matters worse, such as the duty escalator rises – again government policy has added to inflation. Green taxes are also increasing our energy bills. The bottom line is that the Bank of England has done everything that can be expected of it. But the current government has thrown petrol on the fire through its failed policies.
Stephen Forward, Essentially Wine
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