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The effect the UK Election will have on Moville

Posted Monday, May 10, 2010

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UK Election

The pound sterling was just creeping up nicely before the UK election.

It had reached close to €1.18.

A nice little push upwards could have taken it to €1.25 and proved a great boon to the Moville economy.

Difference

Local shopkeepers were just starting to notice a difference.

However, with the uncertainty of a hung Parliament the pound lost 2.5 cents down to about 1.155.

It has now climbed above the €1.16 level.

Presumably, once the uncertainty is over it will start to rise again.

That would be a huge boost to trading in Moville.

VRT

The other area that could be affected, particularly if the Tories win power, would be in the Vehicle Registration Tax.

My understanding is that the VRT is levied because of the difference in the UK Vat rate of 17.5% and the Irish rate of VAT of 21%.

However, the likelihood is that VAT is likely to rise in the UK, expecially if the Tories win power.

VAT Rise

A VAT rate of 20% is being touted.

That would help Moville in that it would increase the price of goods and services in the UK and narrow the differential between UK and Irish prices.

Things have been pretty bad for Moville recently and the weak sterling rate has been a major part of that.

It looks as if with the passing of the UK Election Moville may get some much needed relief on that.

If anyone is thinking of buying a big ticket item in the North this might be a good time to do it before the VAT rate goes up.