12 Sep 2023
A report published by think tank the Resolution Foundation has suggested that the run-up to the next General Election will be affected by continued living standards stagnation.
The Resolution Foundation said that typical working-age households are on track for a year of income stagnation in the run-up to the next Election, with poorer families set to experience further income falls as a result of tax rises, the end of cost-of-living payments and higher housing costs.
However, key aspects of the UK's economic outlook are improving, according to the Resolution Foundation. Inflation has started to fall from its October 2022 peak of 11.1%; average earnings are growing faster than prices; and the Bank of England's interest rate rise cycle is 'likely approaching its end', according to the think tank.
Commenting on the report, Adam Corlett, Principal Economist at the Resolution Foundation, said: 'The good news for the government is that Britain's economic outlook is improving as it enters a crucial election year. The bad news is that the living standards outlook is still dire, with overall stagnation and further income falls on the way for less well-off households.
'Rapidly rising interest rates mean that families remortgaging next year could see their bills rise by £3,000, while richer and older households are set to take the lion's share of Britain's £90 billion savings income boom.
'The worst of the cost-of-living crisis may be behind us, but except for those with significant savings, it is stagnant living standards rather than boomtime Britain that the immediate future has in store.'