The outlook for UK living standards will be “shocking” and “terrifying,” a think tank warns
Leeds, United Kingdom © Getty Images / Daniel Harvey Gonzalez / Contributor
Households in Britain will see their spending power slashed by an average of £3,000 ($3,471) by the end of next year, analysis from the Resolution Foundation think tank showed, as cited by The Guardian.
The study indicated that spiking energy bills would cut household incomes in the country by 10% and push an extra 3 million people into poverty.
The outlook for living standards was “shocking” and “terrifying,” the think tank warned, noting that without serious government support, the drop in the typical household’s income would be twice as severe as that in the global financial crisis and worse than the 8% drop that followed the oil price shock of the 1970s.
“No responsible government could accept such an outlook, so radical policy action is required to address it,” Resolution Foundation researcher Lalitha Try wrote, adding: “We are going to need an energy support package worth tens of billions of pounds, coupled with increasing benefits next year by October’s inflation rate.”
The researcher warned of the biggest drop in UK living standards in at least a century as prices were rising faster than wages.
The report projected that inflation-adjusted average incomes would continue falling until at least the middle of 2023, taking real earnings back to their levels of 2003. Living standards are on course to slide by 5% in the current 2022-23 financial year and by a further 6% in 2023-24. Such a decline has not been seen in Britain since World War Two, it said.
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