By Polly Curtis, Tim Webb and Tom Burden, The Guardian, January 4, 2011

The rise in VAT marks the true start of the coalition's "squeeze" on families, the Labour leader, Ed Miliband, said yesterday as business leaders warned of the potential damage of the tax increase to a fragile economy.

Shoppers flooded high streets yesterday, snapping up items such as furniture, electrical goods and kitchens in an attempt to beat the VAT rise, from 17.5% to 20%, which took effect at midnight....

The British Beer and Pub Association (BBPA) said the VAT rise would result in 8,800 industry job losses and even more pub closures as people opt to drink cheap supermarket alcohol instead of going to the pub. The British Retail Consortium said that seasonal sales and promotions to absorb the extra VAT costs would mean that the worst of the increases would not be felt for some time ....

More than two-thirds of small firms are expecting the rise to damage their businesses,...