People are facing a "painful" and "depressing" few years ahead, economic think tanks have warned, after forecasts showed growth in living standards grinding almost to a halt. According to the Resolution Foundation, typical working-age households are projected to see their disposable income decline by £1,050, or 3%, between now and 2029. Reinforcing these concerns, the Institute for Fiscal Studies (IFS) stated that the current decade is on track to be the worst for household income growth on record.
The Office for Budget Responsibility (OBR) has attributed this challenging financial climate to a combination of higher borrowing costs and inflation, which it claims were triggered by the US-Iran war. In response to the escalating cost of living, Chancellor John Healey announced a series of measures, including a £100 support payment designed to help families manage rising energy bills. However, the Resolution Foundation noted that such interventions would likely remain insufficient to fully offset the impact of increased energy costs.
Addressing the government's position, Chancellor Healey stated that his latest Budget was intended to provide "breathing space," though he acknowledged that the government could "never remove completely" the pressures of the rising cost of living. Ruth Curtice, chief executive of the Resolution Foundation, characterized the current parliament as a tale of two halves. She noted that while the initial period was defined by solid economic growth, rising living standards, and increased funding for public services, the remainder of the parliamentary term would be "tough going."
