Most retailed goods are not British made, so wouldn't create manufacturing job but serve to keep retail rental up.
Would prices go down though such as Poundland or pricing at £x.99p , 2.5% extra profit?!
Will prices go down, for long enough? Or will it be just 2.5% added to bottom line for businesses. Say they make 2.5p in the £ profit, this extra 2.5p in the pound double their profit, so good for business. (not saying myself profit is good or bad as profit is fundamental in business).
FT reports in August 2016:-
“A temporary return of the normal VAT rate to 17.5 per cent could absorb all the shock [from sterling] in year one”, says Gilles Moec at BAML.
He calculates it would come at a fiscal cost of around 0.7 per cent of GDP, leading to a temporary spike in the public deficit and a permanent impact on total government debt.