Households face being more than £1,000 worse off over the next two years as they are hammered by the energy crisis and Labour tax raids, according to a think-tank.
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they → face → tank
The Resolution Foundation gave the estimate for working age people's disposable incomes in a bleak assessment of the issues facing the country.
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Foundation → give → country
Chief executive Ruth Curtice said John Healey's Budget yesterday had been 'scattergun', offering £100 off energy bills to homes in lower council tax bands.
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Budget → say → bands
She warned that even those getting help - along with maintaining suspension of 5 per cent VAT on electricity costs - would face higher bills next year than they did during the last crisis in 2022.
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they → warn → 2022
Ms Curtice said the Chancellor had done 'little to address the sharp challenges facing Britain' and support was spread 'too thin'.
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support → say → Britain
The Resolution Foundation gave the estimate for working age people's disposable incomes in a bleak assessment of the issues facing the country
The think-tank higlighted that the 2020s were set to be the worst decade on record for Real Household Disposable Income (RHDI) per head
Chief executive Ruth Curtice said John Healey's Budget yesterday had been 'scattergun', offering £100 off energy bills to homes in lower council tax bands
The report by the think-tank - regarded as a Labour favourite - calculated figures using Department for Work and Pensions data, instead of the Real Household Disposable Income metric favoured by the Treasury's independent Office for Budget Responsibility.
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report → give → Responsibility
The Foundation said median non-pensioner real incomes were projected to grow by just 1.8 per cent across this Parliament.
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incomes → say → Parliament
However, all the growth has already happened - with the researchers warning the outlook from now on is 'dire'.
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outlook → happen → ?
'We project that the typical non-pensioner household will have experienced real income growth of 5 per cent between 2023-24 and 2026-27,' the report said.
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report → project → 2023
But their incomes are expected to fall by 3 per cent between 2026-27 and 2028-29, equivalent to a drop in annual household disposable income of £1,050 (in 2026-27 prices) during this period.
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incomes → expect → period
This poor outlook reflects falling real wages, a rising tax burden and housing costs rising faster than inflation.
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outlook → reflect → inflation
In her response to the Budget, Ms Curtice said: 'Faced with a tough backdrop amid global economic turmoil, the Chancellor delivered a scattergun Budget that did little to address the sharp challenges facing Britain.
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that → say → Britain
'Cost of living support is being spread far too thinly and will leave even those families receiving help facing higher energy bills than they did during the last energy price shock.
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they → spread → shock
Stepping back, this Parliament is increasingly looking like one of two halves, which yesterday's Budget did little to address.
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Budget → step → little
The first half has been marked by rising living standards, solid economic growth and extra funding for public services – funded by huge tax rises – none of which was enough to prevent dramatic half-time substitutions in Downing Street.
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none → mark → Street
The new occupants will hope for better political fortune in the second half, but it could prove tough going against a projected £1,000 fall in disposable incomes.
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it → hope → incomes
A more dramatic change of tactics may be needed, and we did not learn how the Government will choose between public service ambitions and household incomes.
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Government → need → ambitions
Next year the choices will unavoidably get starker.'
The OBR gave its own view on the prospects for households in forecasts accompanying the Budget yesterday.
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OBR → give → Budget
The independent body said it anticipated 'no growth' in real earnings in 2027 and 2028, while the level will only recover to 0.5 per cent a year by 2030 in a central forecast.
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level → say → forecast
That is partly because firms are seen as gradually passing on Labour's national insurance hikes to workers, rather than accepting lower profits.
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firms → see → profits
The picture was also grim for RHDI per head, a metric that was explicitly targeted by Keir Starmer.
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that → target → Starmer
It is a measure of what is left after taxes and benefits and the effects of inflation.
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what → leave → inflation
The OBR said this year the boosts from wage growth and benefits were being outweighed by 'higher prices and taxes on income and wealth'.
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boosts → say → income
The inflation spike triggered by the Iran war was seen as pushing 'down on real wage growth, but up on nominal wage growth'.
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spike → trigger → growth
'The latter then weighs on RHDI because frozen income tax thresholds increase the degree to which effective tax rates rise as nominal earnings increase,' the watchdog said.
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watchdog → weigh → which
The OBR said an expected easing of energy prices should spark a partial recovery in RHDI per person, rising an average of 0.75 per cent a year up to 2030-31.
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easing → say → 2030
However, it is still forecast to be worse by then than had been envisaged in March.
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it → forecast → March
The OBR said this was a continuation of the 'historically weak' performance since the 2008 credit crunch.
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this → say → crunch
'This slowed significantly in the aftermath of the financial crisis, due to lower growth in productivity and real wages,' the report said.
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report → slow → productivity
'Growth reached a historic low over the 10 years to 2025-26, averaging just ¼ per cent a year, and we expect it to fall further in the near term.
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it → reach → term
'By 2029-30, our central forecast sees growth over the prior 10 years averaging less than 0.1 per cent a year.
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forecast → see → cent
David Miles of the OBR told a briefing: 'It's a pretty grim picture.
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It → tell → briefing
If you go back to just before Covid... (it) is virtually no growth in per person real household disposable income.'
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it → go → income
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