The Guardian
· collected 2026-10-07 · by Heather Stewart and Jessica Elgot
A study by the Joseph Rowntree Foundation predicts that under Labour’s leadership, Britain will face its worst period for living standards since records began in 1961, with average household incomes set to decrease by £440 to £770 after housing costs. The foundation attributes this dire outlook to rising energy and housing expenses and calls for significant policy changes to mitigate the impact on citizens’ livelihoods. Louise Haigh, tasked by Andy Burnham to address these issues, is leading initiatives aimed at both short-term cost-of-living measures and long-term structural interventions, though there are concerns within government about the adequacy of proposed budget allocations.
Written locally by qwen2.5:14b on 2026-10-07,
using this article's own text rather than the other coverage of the
same event (that is the story summary below).
Soaring energy and housing costs mean Labour is on course to preside over the worst parliament for living standards in modern times, a stark analysis warns.
asserted
analysis → soar → times
Three weeks ahead of John Healey’s budget, the Joseph Rowntree Foundation said Britain faces a “dire” outlook unless the government takes “bold policy action”.
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government → say → action
The JRF predicts that, after housing costs, average household incomes will be between £440 and £770 lower in real terms in 2029-30 than when Labour came to power two years ago.
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Labour → predict → power
Even the lower end of that range would mark the biggest decline in living standards since modern records began in 1961, the thinktank said, and come on top of a tight squeeze in the last parliament.
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thinktank → mark → parliament
Louise Haigh, the first secretary of state, has been tasked by Andy Burnham to lead the Cabinet Office cross-government taskforces, with two focusing on turning around living standards.
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two → task → standards
One is looking at short-term cost of living measures to help on housing and energy, and the other at big structural interventions such as public control that might alleviate those pressures long term.
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that → look → pressures
Their work will eventually form part of the 10-year plan expected later this autumn, which Burnham began discussions about with cabinet ministers at a Chequers away day this week.
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Burnham → form → day
Haigh has repeatedly told officials that there will have to be “trade offs” in order to prioritise alleviating the cost of living and public control.
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Haigh → tell → living
At the budget, Burnham has promised to offer a “breathing space” to voters and Healey is expected to offer £1bn in additional support to energy consumers; but there are concerns inside government about whether that goes far enough.
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that → promise → government
Healey is minded to rebuff a call from the energy secretary, Miatta Fahnbulleh, to spend billions more on removing levies from bills altogether.
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Healey → rebuff → bills
The most likely solution is understood to be increasing the warm homes discount – a £150 discount to energy bills offered to households on certain benefits.
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solution → understand → benefits
The chancellor is understood to be considering raising this by £100, with the rise funded by taxpayers.
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rise → understand → taxpayers
The foundation’s living standards analysis used the Bank of England’s two projections for energy prices – a “central” and an “adverse” scenario.
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analysis → use → prices
The thinktank has pointed out that since the Bank set these out in July, real-world events have tracked close to the adverse scenario, with oil prices surging back above $100 a barrel after hostilities resumed in the Middle East.
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hostilities → point → East
By driving up the cost of energy, the renewed conflict has also increased expectations that the Bank will raise the base interest rate to tackle resurgent inflation.
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Bank → drive → inflation
Markets are now betting on four quarter point increases to 4.75% by the end of next year.
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Markets → bet → year
Borrowing costs for homebuyers have already jumped in response to the resulting turmoil in bond markets – with the average cost of a five year fixed rate mortgage hitting 6% this week for the first time in three years.
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cost → jump → years
Chris Belfield, the chief economist at the JRF, said: “Without bold policy action on living standards, families are set to be poorer than they were a decade ago.
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they → say → standards
This is terrible both for families who are just treading water to get by and the more than 7 million families who are already routinely going without essentials like food and basic toiletries.
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who → tread → food
Some forecasts have suggested the typical household dual-fuel bill could leap by 16% to the equivalent of £2,000 a year in the first quarter of next year.
uncertain
bill → suggest → year
Given the scale of the looming squeeze, the foundation has argued for a more ambitious package of measures on energy than Healey appears minded to offer.
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Healey → give → energy
It would like to see a baseline level of energy offered to all households at a cheaper price, with those in greater need entitled to more of these cut-price units of gas and electricity.
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those → like → gas
Other recommendations include making benefits more generous, by relinking local housing allowance to average rents; and increasing universal credit, as the Conservatives did during the Covid pandemic.
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Conservatives → include → pandemic
This could be paid for via changes such as increasing capital gains tax rates to match income tax, it argues.
uncertain
it → pay → tax
The JRF analysis of changes in living standards over time differs from those of the Office for Budget Responsibility and other thinktanks such as the Resolution Foundation because of different ways of accounting for housing costs.
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analysis → differ → costs
Despite Burnham’s promise to correct 40 years of economic missteps, Healey’s budget is expected to be relatively modest, with important decisions on tax and spend delayed until next year.
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decisions → correct → year
These include when the UK will implement spending 3% of GDP on defence – a target Healey claimed to be committed to when he resigned as defence secretary earlier this year.
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he → include → secretary
In his 28 October statement, the chancellor is expected to focus on filling the gaps in the defence investment plan announced by Keir Starmer’s government in June; and laying out how the Treasury will devolve some income tax revenue to regional mayors.
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Treasury → expect → mayors
The Aporia
