Representatives of the UK Fashion & Textile Association (UKFT) expect fashion businesses in the UK to be buoyed by this week's emergency budget in the country.

As reported yesterday (22 June), new Chancellor George Osborne has delivered the first budget of the UK's new coalition Government to parliament.

In a bid to reduce the national deficit, the Government will increase VAT from 17.5% to 20% from 4 January 2011 - at some cost to retailers.

However, board members of the UKFT believe that other policies to help small businesses will favour the country's fashion sector.

Eric Musgrave, director general UKFT: "It was good that George Osborne confirmed investment in business and exports play a major role in the country’s economic recovery. Given the state of our economy it was a quite well-balanced Budget with some small, but welcome, incentives for small companies."

The association is hoping the Treasury's cuts do not affect clothing and knitting suppliers in the country.

"Now we have to wait for October to find out what cuts will be made to which Government departments as these could effect the support given to export promotion," Musgrave added.