More than half the retailers and consumer goods manufacturers in the UK are planning to increase prices in 2011 as the value-added tax increases on Jan. 4, a KPMG survey found. "In today's price-sensitive market, any increases may well have a damaging effect on sales volumes," said Martin Scott, a partner at KPMG. "Any short-term boost to profitability may be offset if longer-term demand in the economy is dampened by pushing up inflation - and with economic forecasts predicting a slowdown in the new year, this could threaten an already precarious recovery."

Related Summaries