A hike in VAT is ‘inevitable’ after the election as the government grapples with a mounting debt crisis, experts warned yesterday.
The Treasury will have to lift the tax from 17.5 per cent to 20 per cent to raise an extra £12 billion of revenue a year, according to analysts at consultancy Oxford Economics.
The next Government may also have to delay the state retirement age to 68 in order to cope with the biggest debt crisis since the Second World War, the report said.
The warning came as official figures revealed the UK government has borrowed almost £330 million a day so far in the current financial year - the most on record. (more)
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