This Decade Set To Be Worst For Household Incomes On Record, Says Think Tank
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A leading think tank has warned that this decade is set to be the worst for household income growth ever recorded.
In a briefing on Thursday, Helen Miller, Director of the Institute for Fiscal Studies (IFS), said the UK is facing the "worst decade for growth in household incomes on record".
"It's depressing. No amount of temporary cost-of-living packages will fix that," she said, adding: "We need a stronger economy."
Miller and other IfS economists were speaking to journalists a day after Chancellor John Healey delivered the Andy Burnham Labour government's first Budget.
Healey said the package of policies announced on Wednesday would provide people with "breathing space" in difficult economic times for the country.
At its heart were a series of measures designed to further address cost-of-living pressures, including a direct £100 payment to around 20m households in the coming weeks to help with the cost of energy, and the removal of standing charges from energy bills.
In his House of Commons statement, Healey also sought to stress that "global economic storms" like the impact of the war in Iran are putting strain on the UK economy.
Tom Wernham, economist at the IFS, said analysis shows households are set to see "very little growth at all" in their incomes this decade, "only coming in around 2 per cent over 10 years".
"That 2 per cent over the decade is really tiny compared to the 2010s. We actually saw about 12 percent of growth in that decade, and that decade itself was the lowest growth decade on record compared to all the other decades back to the 1950s," he said.
"This is looking like a really bleak decade for household income growth," Wernham added.
The warnings demonstrate the challenge facing Prime Minister Burnham in trying to convey a message of hope and optimism to voters amid gloomy economic warnings.
Speaking following the Budget yesterday afternoon, Burnham said the UK is not "immune to the pressures on finances coming from the situation in the Middle East, and the impact that that's having on the cost of fuel and the cost of energy".
