Households face another “lost decade” in their standard of living as disposable incomes will be no higher in 2027 than they were in 2017, economists have warned.
The Institute for Fiscal Studies said Jeremy Hunt’s Budget will see more people dragged into paying more taxes, leaving basic rate payers £500 worse off next year, and higher rate payers £1,000 down.
Furthermore, while inflation may be coming down, prices remain far higher than wages than two years ago.
IFS director Paul Johnson said in his post-Budget briefing on Thursday, that the Office for Budget Responsibility may be “relatively optimistic in the medium term”.
He added: “It still thinks that real households disposable incomes will be no higher in 2027 than they were in 2019 [and] barely higher than in 2017.
“A lost decade – one might say another lost decade – for living standards.”
This story is being updated.