Will Philip Hammond free up nearly £20bn to be ploughed into businesses with a dramatic VAT cut next week?
Philip Hammond could free up nearly £20bn to be ploughed into UK businesses by cutting VAT next week, according to figures from commercial insurer NFU Mutual.
Hammond will present his first Autumn Statement on 23 November, and research by the firm has found that two-thirds of consumers would increase spending if VAT was reduced.
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In fact, NFU Mutual estimates that cutting VAT from 20 per cent down to 15 per cent would hand UK adults an average of £547 per year in extra spending power.
And with 67 per cent of those adults willing to spend, the firm estimates an overall injection of £19.3bn into British businesses.
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Even a much smaller cut of just one per cent could generate up to £3.9bn in spending, the insurer said.
The UK's retail, hospitality and leisure sectors would likely be the beneficiaries of any extra spending, with 18-24 year olds rated as the mostly likely to splash the cash.
NFU Mutual commercial sector specialist Paul Shattock said: “The encouraging sign is that there is clearly an appetite for increased spending amongst consumers.”