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VAT threat to graduate jobs 'overplayed', says economist

Published: Wednesday, 05 January 2011   Category: Graduate Job sector Reports

A leading economist at a financial information firm has announced that the jobs threat posed by yesterday's VAT rise is "overplayed".

This means that people looking for graduate jobs may not be hindered by this particular threat.

Paul Smith, who is senior economist at Markit, has told the Recruiter magazine that he disagrees with Labour leader Ed Milliband's suggestion that a VAT rise is "the wrong tax at the wrong time" and could cost 250,000 jobs.

Value Added Tax went up by 2.5 per cent to 20 per cent yesterday (Tuesday January 4th); Mr Smith says this will have a "minimal impact" on jobs, which is good news for those looking for graduate opportunities.

However, Mr Smith told the news provider that, although the VAT rise is not a threat, jobs will be affected by cuts.

Government cuts have "impacted employment and hiring decisions … over recent months," Mr Smith said.

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