Sinn Fein's Economic Spokesperson has slammed this week's increase in VAT as the wrong way to address the UK's deficit.

Mitchel McLaughlin joined other critics and said that the increase will affect those who can least afford it, increase inflation and reduce overall growth.

The NI Independent Retail Trade Association (NIRTA) also said the rise from 17.5% to 20% was at a time when local retailers were already struggling.

The Chief Executive of NIRTA, Glyn Roberts, believes the rise in the rate of VAT will turn out to be completely counterproductive.

"I think this is a major mistake by the coalition Government at a time when we need to stimulate consumer demand," he said.

Stormont MLA Mitchel McLaughlin continued: "The increase in VAT for 17.5% to 20% is a further punitive measure from a Tory dominated coalition.

"It will reduce spending power of the consumer and will therefore affect any economic recovery while increasing inflation. It is another example of the mistaken economic policy of cut backs, rather than investment, to escape recession.

"The increase in VAT will really affect those who can least afford it by reducing money for the weekly grocery bill, it will add to already inflated home heating bills, and will increase fuel prices at the pumps to record highs.

"The raising of VAT is expected to bring in £13bn. However if the British government were really interested is addressing the burden that the banking system has placed on the budget then they should address the cause of the problem in the interests of wider society," he said.

(BMcC/GK)