Household income ‘will rise by just 0.1 per cent a year over the next four years’ – the worst figures ever recorded – as think tank warns families face a ‘sobering’ economic reality
- Resolution Foundation said that families are facing a ‘sobering’ economic reality
- Think tank has forecast that household disposable income will rise by 0.1% a year
- Such a level of annual growth over the next four years would be lowest on record
Families will face a ‘sobering’ economic reality over the next four years, with household income set to rise at the slowest rate ever recorded, a think tank has warned.
Weak wage growth and higher taxes mean household disposable income will increase by 0.1 per cent a year over the course of the current parliament, according to the Resolution Foundation.
That would be the lowest growth over a parliament on record, beating the previous low point of 0.3 per cent seen between 2015 and 2019 under the premierships of David Cameron and Theresa May.
The think tank’s predictions are likely to pile the pressure on Rishi Sunak after his Budget last month as critics accuse the Chancellor of failing to do enough to tackle the cost of living crisis.
The Resolution Foundation has warned families face a ‘sobering’ economic reality in the coming years as the think tank piled the pressure on Chancellor Rishi Sunak
Adam Corlett, principal economist at the think tank, told The Times: ‘Last week the Chancellor hailed his budget as marking a “new age of optimism”, but the economic reality facing families across Britain is far more sobering.
‘The official economic outlook is for Britain to experience the weakest parliament for income growth since records began, with “growth” of just 0.1 per cent a year.
‘Worse still, we’re currently under-performing against even this terrible forecast.’
It comes after Labour warned that family food bills could increase by more than £180 next year because of spiking inflation.
The Office for Budget Responsibility has forecast that Consumer Prices Index inflation could rise to more than four per cent in 2022.
Such a rise would add about £3.50 to the cost of an average family’s weekly food shop, equating to about £183 more over the course of the year, according to Labour analysis.
Labour accused the Government of failing to ‘get a grip’ on the cost of living crisis and shadow chancellor Rachel Reeves repeated calls for ministers to slash VAT on fuel bills to help struggling families this winter.
Mr Sunak said yesterday that he is ‘cognisant and aware’ of price inflation and insisted ‘where this Government can act we will’.
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