VAT reduction and the price of broadband

It is always the same principle, when the price of crude oil increases so does petrol, when interest rates go up, the banks are quick to act.

Therefore, when the Chancellor of Exchequer reduces the VAT rate, is that going to mean that the price of Broadband and Digital TV will fall?

The VAT rate has been reduced to fifteen per cent and will remain so for well over a year.

It is without doubt that should the change have been the other way, and the VAT rate was increased, the bills would have followed.

Obviously, this two and half per cent VAT cut does not amount to much, it depends on the price that the user pays their provider.

Nevertheless, it could be anything from 50p to £1 or more in some cases, but for the providers this could be a nice little windfall.