The figures released alongside Jeremy Hunt’s autumn statement on Thursday from the Office for Budget Responsibility said the UK is in a recession that will wipe out eight years of growth, with British households facing the biggest drop in living standards since they started the files. The Resolution Foundation think tank said on Friday that the dire economic outlook means real wages are no longer expected to return to 2008 levels until 2027. If wages continued to rise to their pre-crisis peak, workers would be £292 a week, or £15,000 a year, better off over the next five years. The think tank said Hunt put further pressure on the “squeezing middle”, with the autumn statement delivering a permanent 3.7% income hit to typical households. The Resolution Foundation said the move to keep benefits in line with inflation next year represented the biggest rise since 1991, making a huge difference to those on low to middle incomes. Households on Universal Credit will receive an average of £244 in support next year. However, cutting support for rising energy bills next April will mean the government will help households offset only 30% of the increases expected over the next two years. Around one in eight families – 3.3 million homes in total – will pay more than £2,000 more for energy than last year. However, the poorest fifth of UK households will be covered for 48% of the expected increases due to the government’s targeted lump sum payment scheme. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. “As an energy importer during an energy price shock, Britain becomes poorer,” said James Smith, director of research at the Resolution Foundation. “Deciding how to do that was, to a large extent, the chancellor’s choice. It decided that households would do so with higher energy bills, higher taxes and worse public services than previously expected. Whether the choices were difficult to make or not, the reality will be living in the years to come.” Speaking on Friday morning, Hunt said: “People will feel that, despite the difficulties, they can do things like go to the pub. We want people to feel that the government is helping them through the recession. There is a plan, we will get through it, reduce inflation and grow the economy healthy when we get to the other side.”
