Skip to main content

Covid and Tory Brexit could see households £1,000 worse off next year, think tank warns

THE knock-on effects of the Covid-19 pandemic and a Tory Brexit could see Britain’s households £1,000 worse off next year, a leading think tank warned today. 

Earnings will be weighed down by inflation next year, a cut in benefits and a rise in National Insurance, the Resolution Foundation report warned.

The Uncertainty Principle report examines Britain’s economic outlook as Chancellor Rishi Sunak prepares to deliver his Budget and spending review next Wednesday.

The group warned that the average household income could see a real-terms fall of 2 per cent by the end of next year, compared to earlier forecasts made by the Office for Budget Responsibility. 

As a result of rising inflation, households would end up being more than £1,000 worse off next year, the foundation said. 

Resolution Foundation research director James Smith said: “The backdrop to the Budget will be a strong recovery from the pandemic that risks being derailed by rising inflation and economic disruption that will squeeze both the Chancellor’s borrowing windfall and family budgets.

“The decisions that Rishi Sunak will take next Wednesday will help to define the rest of the parliament, and the type of Chancellor he’ll be remembered as.

“But amid such long-term and legacy-defining announcements, he must not forget the cost of living crunch facing families up and down the country right now.”

The warning comes as energy bills are set to skyrocket across Britain, while food and other goods continue to become more expensive.

Earlier this month the government went ahead with the biggest overnight cut to benefits on record, slashing universal credit by £20 per week.

A HM Treasury spokesperson said: “We are supporting people with the cost of living, including through a new £500m support fund to help vulnerable households, the energy price cap, and support with energy bills through the winter.

"Our Plan for Jobs is also helping people across the country to find great work and progress in their careers.”

OWNED BY OUR READERS

We're a reader-owned co-operative, which means you can become part of the paper too by buying shares in the People’s Press Printing Society.

 

 

Become a supporter

Fighting fund

You've Raised:£ 13,288
We need:£ 4,712
3 Days remaining
Donate today