VAT rise drives confidence down

The increase in VAT to 20 per cent earlier this month has contributed to a collapse in consumer confidence. The GfK NOP Consumer Confidence barometer registered a reading of minus 29, a level not seen since the depths of the recession: the last time it was lower was in March 2009.

Nick Moon, the managing director of GfK NOP Social Research, said: "January's drop represents an astonishing collapse. The VAT increase seems to have hit people's economic confidence hard."