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Current trends and the lessons of the past indicate that a 2.5% rise in VAT is almost inevitable after the general election no matter which party wins.

That's the claim of Paul Stainforth, tax expert at LexisNexis, who said history suggests that rises in VAT tend to be made at the start of a new Parliament regardless of whether there is a change of government.

VAT increased from 12.5 to 15% in the June 1979 Budget which followed the May 1979 election won by the Conservatives while an extension of the 25% rate to 'luxuries' was included in the first full Budget of the new Parliament in April 1975 following Labour's victory in October 1974.  A 25% VAT rate for petrol was also included in the third Budget of 1974.

Increased VAT would also bring the UK more in line with the average EU rate of 20%, Stainforth added. Of all the member states, only Luxembourg and Cyprus (with standard rates of 15%) and Spain (16%) currently have lower rates of VAT than the UK with Spain having pledged to increase VAT to 18% in July 2011 and Finland's rate set to rise to 23% this July. Even Germany, which traditionally has low rates of VAT, currently has a higher standard rate of VAT (19%) than the UK.

"Given the size of the deficit, and the trend to increase the rate of VAT in EU member states, it could be a big surprise to the markets if an increase in the UK's standard rate of VAT is not announced in the first Budget after the election, regardless of which party gets into power," Stainforth said.