Recruitment agencies, especially those that supply to the public sector where they cannot recoup VAT, would hope that the calls to reduce VAT are followed through.

The Federation of Small Businesses (FSB) has said that UK’s small firms have reported a drop in sentiment in the 3 months to the 30^th June. Therefore there recommendation is to reduce VAT by 5% to stimulate the economy.

The treasury views this change as having an adverse effect, but this has not stopped Ernst & Young from cutting its growth forecast for the UK in 2011 from 1.8% to 1.4%. The problem is that all the growth is happening from exporting and that many households not involved in exporting are feeling the squeeze in income.

The FSB believes that any lost revenue by making VAT cuts, will be compensated by a demand for jobs and a higher economic activity.

The economy is increasingly reaching a crossroads where bad sentiment is creeping in and it is at these critical times where the government needs to prevent the worsening mood and make sure that the people are buoyant about the market over the coming years.

Recruitment agencies will be pleased to hear Amazon are expanding their operations with a new warehouse announced for Rugeley, Staffordshire, which will begin operating in September.

The operation alone should add 900 jobs and this is on top of the new plans to open a centre in Dunfermline before the end of 2011, which will create 750 permanent jobs and 1500 temporary jobs.

Amazon is expanding at an amazing rate, from a humble beginning in 1998 as a way of selling books it has now expanded in all areas of supplies including food and fashion,

Mr Valdez’s from Amazon also added that they expect a busy Christmas and look forward to putting together a competent team to deal with this period. On this note Amazon also announced a new customer service centre in Edinburgh next month for Kindle support, creating 500 permanent and 400 temporary positions.