Author Lauren Howells
Britain is on course for the longest period of falling living standards since records began more than 60 years ago, according to the Resolution Foundation.
Real household disposable incomes set to fall for unprecedented 19 successive quarters
which “works to improve the living standards of those in Britain on low to middle incomes”, found that the current income squeeze is set to last longer than the post-crash squeeze, “with real household disposable incomes set to fall for unprecedented 19 successive quarters between 2015 and 2020”.
“Downward pressure” on living standards
It also talked of “downward pressure” on living standards and “upward pressure” on inequality and concluded that by the end of the parliament, the poorest third of households were set for a loss of £715 a year on average, while the richest third would gain an average of £185.
Economy on course to be £42 billion smaller in 2022 compared to March 2017 forecast
The Resolution Foundation also said that the economy was on course to be £42 billion smaller in 2022, compared to the March 2017 forecast.
It also criticised the abolition of stamp duty for many first time buyers, saying that the £3 billion cumulative cost of this could have supported the building of 40,000 social rented properties or around 140,000 homes through the government’s Housing Infrastructure Fund.
Director of the Resolution Foundation, Torsten Bell, said:
“While Philip Hammond chose to take a relaxed approach to additional borrowing, families are unlikely to do so when it comes to the deeply troubling outlook for their living standards that the Budget numbers set out. Families are now projected to be in the early stages of the longest period of continuous falls in disposable incomes in over 60 years – longer even than that following the financial crisis.”
Mr Bell also spoke of what he described as the “stamp duty rabbit”, which he said was a very poor way to boost homeownership.
“Grim economic backdrop”
“Faced with a grim economic backdrop the Chancellor will see this Budget as a political success. But that would be cold comfort for Britain’s families given the bleak outlook it paints for their living standards.”
Mr Bell also spoke of the for 2017, which the Office for Budget Responsibility (OBR) cut earlier this week from 2% to 1.5%. Mr Bell described this as the “mother of all economic downgrades”.
No “bright future” for UK on current forecasts
Mr Bell added:
“Hopefully the OBR’s forecasts will prove to be wrong because, while the first sentence of the Budget document reads ‘the United Kingdom has a bright future’, the brutal truth is: not on these forecasts it doesn’t.”