Well, they would say that, wouldn't they?

From Citywire:

Economists told MPs that a VAT hike would be well received by the City as it would be a transparent, measurable move to cut the country's growing debt pile and would remove uncertainty.

Asked whether the market would prefer a big VAT hike 'nice and early' both Alan Clarke, economist at BNP Paribas and Simon Hayes, chief UK economist at Barclays Capital said they thought the market would welcome such a move.

Hayes told the Treasury Select Committee: 'I think that would be taken very positively by the financial markets. The attractive thing at the moment about tax increases is that they are straightforward. They can be pre-announced. They are credible and you can have a reasonably fair idea about how much money they will raise,' he said.

Yup.

These 'economists' work for banks, of course, and they follow The Golden Rule that the best tax is one that somebody else has to pay. Remember that banking, finance and insurance are largely exempt from VAT, as are house prices or residential rents. Residential new builds are zero-rated (so no VAT to pay by builder can reclaim input VAT).

So to Hell with the productive economy which has to generate all the VAT, let them pay the extra tax to keep the credit and house price bubbles going and keep the City boys in champagne and Ferraris, eh?

H/t Mark at HPC.