Think tank the Resolution Foundation has suggested that the UK economy is on course for ‘the longest period of falling living standards since records began’.
In its post-Budget analysis, the Foundation stated that the current squeeze on incomes will last longer than the one that occurred following the 2008 recession.
The Resolution Foundation also stated that Chancellor Philip Hammond is faced with ‘grim economic forecasts’, following the recent publication of a fiscal and economic outlook by the Office for Budget Responsibility (OBR).
In its report, the OBR revised down its outlook for productivity growth, business investment and Gross Domestic Product (GDP) growth across the forecast period. It reduced its 2017 growth forecast from 2% to 1.5%, and predicted that growth will subsequently pick up to 1.6% by 2022.
Commenting on the Resolution Foundation’s analysis, Torsten Bell, its Director, said: ‘Faced with a grim economic backdrop, the Chancellor will see this Budget as a political success. But that would be cold comfort for Britain’s families given the bleak outlook it paints for their living standards.
‘Hopefully the OBR’s forecasts prove to be wrong because, while the first sentence of the Budget document reads ‘the United Kingdom has a bright future’, the brutal truth is: not on these forecasts it doesn’t.’
Meanwhile, commenting on the ‘grim forecasts’, the Chancellor stated: ‘The challenge for us as a nation is to prove them wrong.’