Think tank the Resolution Foundation is predicting an austere future with households facing a miserly increase in income after taxes and fixed costs.
In disappointing news for businesses reliant on disposable leisure spend, economists at the Resolution Foundation have produced modelling that suggests household incomes will rise at the slowest rate on record over the remainder of this parliament. The prediction is based on a combination of stagnating wages, higher taxes and falling employment.
The think tank predicts that disposable income which is defined as a household’s spending power after taxes and other fixed costs, will rise by 0.1 percent a year, the lowest on record. The previous low of 0.3 percent was set between the Cameron and May administrations of 2015 – 2019.
Adam Corlett, principal economist at the Resolution Foundation said: “The Chancellor hailed his budget as marking a ‘new age of optimism’ but the economic reality facing families across Britain is far more sobering.”
He added: “The official economic outlook is for Britain to experience the weakest parliament for income growth since records began, with growth of just 0.1 percent a year.”
He argued that to achieve this requires an economic strategy that has higher living standards as its ultimate goal.