The real earnings of UK workers will fall this year and remain stagnant after that even as the economy recovers from the coronavirus pandemic, according to analysis of the budget that suggests the government will oversee one of the worst periods for UK living standards on record.
Incomes will lag behind inflation during 2021-22 – meaning living standards will drop – and will only rise by an average of 0.3% annually over the course of the next four years, according to the Resolution Foundation, an independent thinktank.
The analysis also suggested the income of the poorest British households will be among the worst affected even as basic benefits are cut to levels not seen since the 1990s. It will drop by 7% in the second half of the 2021-22 tax year after Sunak set a course to remove a £20 weekly uplift to universal credit payments after September, the foundation said.
The Joseph Rowntree Foundation, a thinktank focusing on poverty, says Sunak’s decision to go ahead with the reversal of the £20 per week universal credit uplift, albeit delayed for six months, will plunge 500,000 people into poverty