OBR forecasts two years of falling UK living standards amid tax rises and energy costs
The Office for Budget Responsibility (OBR) forecasts that UK household living standards will fall over the next two years as energy costs rise and taxes increase. The outlook challenges Andy Burnham’s promise to give families “breathing space” and points to a prolonged squeeze on household finances.
The OBR expects the tax burden to reach 37.9 per cent of GDP next year and peak at 38.6 per cent, while growth in 2027 is forecast at 1 per cent, down from 1.6 per cent. Real household disposable income per person is £420 below its level two years ago and is not expected to recover for another two years; over the decade from 2020, it is forecast to rise by just 1 per cent.
In short
- Household living standards are forecast to fall for two years.
- The tax burden is expected to peak at 38.6 per cent of GDP.
- Disposable income per person is £420 below its level two years ago.
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Originally published by Daily Mail as “‘Grim picture’ for family finances as Budget forecasts reveal years of pain – in blow to Burnham’s ‘breathing space’”.