London bus drivers to strike for two days this weekend – Copyright AFP Philip FONG
The influential think tank forecast on Thursday that household incomes in the UK will fall by 10 percent in real terms over the next two years, the sharpest drop in a century.
Inflation is currently at a 40-year high of 10.1 percent, and rates are forecast to rise to 18 percent or more next year due to a sharp rise in energy tariffs.
The Resolution Foundation, which works to improve the living standards of low- and middle-income families, has released projections that median real household incomes will fall by 10 percent between 2021-22 and 2023-24.
This equates to a £3,000 ($3,475) loss.
He blamed “global supply disruptions and the war in Ukraine” as well as low productivity and income growth over the past decade.
The fall in real incomes “is likely to be the worst in at least a century,” the report said.
“With high inflation likely to continue for most of next year, the outlook for living standards is, frankly, horrendous,” said Lalita Trai, one of the report’s authors.
The discovery comes at a time when politicians vying for the British prime minister are facing mounting pressure to come up with massive plans to help ordinary families.
Favorite Liz Truss wrote in The Sun that she would offer “immediate support,” without giving details.
The Resolution Foundation is calling on the new government, to be announced next week, to make policy changes by offering a lower “social tariff” for the most vulnerable.
The fund said the projected fall in real purchasing power “looks like the worst fall in 100 years”, worse than seen in the 1970s or during World War II. He warned of a “harsh winter”.
The drop comes as the average household gas and electricity bill is projected to rise from £1,500 in 2021-2022 to £3,750 in 2022-23, the fund said, although many households spread their heating bills throughout the year. .
His forecast shows that some recovery is likely to occur in 2024-2025, but not enough to make up for revenue losses from 2019-2020.
By 2024, the number of people living in “absolute poverty” is projected to rise by 3.1 million to over 14 million.