UK faces worst decade for household incomes, IFS think tank says, as it warns debt and growth problems remain - BBC

UK Faces Worst Decade for Household Income Growth on Record

The UK is facing its worst decade for household income growth on record, according to the Institute for Fiscal Studies (IFS) think tank. The warning comes as the government's economic outlook is described as a "pretty grim picture" by the Office for Budget Responsibility (OBR).

The IFS head, Helen Miller, has stated that no amount of temporary cost of living packages announced in the Budget will fix the issue, and that big debt and growth problems remain. The OBR's forecast, published yesterday, shows that the tax burden is rising to a new historic high of 38.6%, with real incomes expected to only inch up by 1% over the next two years.

Chancellor John Healey has acknowledged that the government cannot completely remove cost-of-living pressures, but aims to create breathing space. However, critics have criticized the Budget for not addressing the welfare bill, with some arguing that the measures announced are too little, too late.

The Resolution Foundation has warned that even after the extra help is taken into account, households' income after inflation and tax are set to be typically lower across the next two years than the start of the parliament. This could be the second worst parliament for living standards - or income growth - since the 1950s.