Worst Parliament for Living Standards Since Records Began in 1961
The Joseph Rowntree Foundation says average household incomes after housing costs will be between £440 and £770 lower in real terms in 2029-30 than when the government took office two years ago. Even the smaller figure would be the steepest decline since comparable records began in 1961. The Budget is on 28 October.
Chris Belfield, the foundation’s chief economist: “Without bold policy action on living standards, families are set to be poorer than they were a decade ago. This is terrible both for families who are just treading water to get by and the more than 7 million families who are already routinely going without essentials like food and basic toiletries.” The analysis used the Bank of England’s July energy projections, and notes that events have tracked the adverse scenario rather than the central one, with oil back above $100 a barrel. Markets are now pricing four quarter-point rate rises to 4.75% by the end of 2027, the average five-year fixed mortgage went through 6% this week for the first time in three years, and some forecasts put the typical dual-fuel bill up 16% to around £2,000 a year in the first quarter of 2027. Against that, John Healey is expected to offer about £1bn of extra energy support at the Budget, and is reported to be minded to rebuff the energy secretary’s call to spend billions more stripping levies out of bills; the likely route is a higher warm homes discount, though that remains reporting rather than announced policy. Louise Haigh is running two cross-government taskforces on living standards and has told officials there will have to be “trade offs”. This analysis rests on a single source and should be read as one think tank’s projection.