Today Britain's biggest and longest discount sale will begin. Unlike other popular sales like the Next sale or the Debenhams Blue Cross sale, the shops will NOT be opening at some silly hour of the morning, they will not be filling the shelves with crap that has never actually been sold in the store and nor will there be problems returning your good for refunds.
This sale is the 2.5% drop in VAT sale that will be in place for the next 13 months. Unfortunately, it doesn't apply to every single thing as the government wouldn't make any money then. So things like booze, fags and fuel are not going to see this 2.5% drop - they're actually seeing a permanent increase in duty. Neither will your utilities like gas and electricity as you don't pay 17.5% VAT on these anyway.
Like with the drop in interest rates, it's suspected some shops won't be passing the 2.5% drop in VAT onto customers and it'll be interesting to see which retailers are named and shamed for this. What I'm really interested to see if if the price tags are going to break the usual £#.99 format. In theory it has to, because something priced at £2.99 yesterday would be £2.97 today (I know what you're thinking. What a tremendous saving!!! ;-) ).
I don't think this cut in VAT is such a good idea: it's not going to make a significant difference to the cost of products, unless you start entering the thousands of Pounds range, so I don't think it'll stimulate shoppers enough to offset the hysteria caused by the media over the "Credit Crunch". There's also a good chance this will be used by retailers to fill up their pockets as they are not obliged to pass on the discount (remember, they set the price of their goods regardless of what VAT is). And don't forget, this is only for 13 months, so it'll be back up to at least 17.5% (probably more) as of January 2010 and to go with it will be an increase in National Insurance of 0.5% for everyone earning more than £20 000.
I'm not looking forward to 2010 when these changes are reverse, but I have kept our weekly shopping receipt from this week, so will report back next week with our massive savings.