Skip to content
Search
AI Powered
Latest Stories

UK household income will remain worse off for next two years, leading watchdog tells MPs

UK household income will remain worse off for next two years, leading watchdog tells MPs
Representative iStock image
Getty Images/iStockphoto

Growth in household incomes, after taking account of inflation, would effectively stall over the next two years, claimed a leading economics watchdog today (2), suggesting British households will remain worse off than before the pandemic until 2023.

The claim is made by Charlie Bean, a former Bank of England deputy governor and board member of the Office for Budget Responsibility, saying that growth in household incomes, after taking account of inflation, would effectively stall over a couple of years.


GettyImages 180234598 Charlie Bean, former deputy governor of the Bank of England. (Photo by CHRIS RATCLIFFE/AFP via Getty Images)

“We don’t have real household disposable income getting above pre-pandemic levels until the back end of 2023, and it’s growing at a pretty mediocre rate from then on,” Bean said answering questions from MPs on the Treasury committee today (2).

The OBR that came alongside last week’s budget announcement by Sunak also has highlighted how inflation would weigh down household incomes over the next two years, before rising by just 1.3 per cent a year on average by the middle of the decade.

Reacting to Bean’s claims, Sunak later told the MPs on the committee that he was taking action to protect low-paid workers amid the living standards squeeze. However, he admitted it would take time to have an impact on real-terms wages.

“Is it going to happen overnight? Of course these things don’t happen overnight. But we’re putting in place all the things that are required for there to be better wage increases for people over time,” he said.

He added that raising the national living wage, cutting the universal credit taper rate, and investing in training and education schemes and other public services would help those on low incomes.

Bean’s declaration comes a week after the warning by Institute for Fiscal Studies saying that Britain was set for the worst wage squeeze in modern history, with the average worker on course to be £13,000 a year worse off by the middle 2020s than they would have been if wages had risen at pre-2008 financial crisis rates.

More for you

Bira CEO Andrew Goodacre
Bira CEO Andrew Goodacre

'Devastating and out of touch' – indies react to Budget bombshell

Following the initial response condemning the Budget as 'the most damaging for independent retailers in recent memory' from the British Independent Retailers Association (Bira), members have shared their stark reactions to the triple burden of doubled business rates, increased National Insurance, and higher minimum wage costs.

Multiple retailers have calculated specific impacts on their businesses, with costs ranging from £90,000 to £150,000 per year.

"This budget was horrendous for us as a company. Estimated costs to be around £110,000 - £120,000 per year," said Andrew Massey of Masseys DIY in Swadlincote, Derbyshire.

Keep ReadingShow less
Brocks at Rockwell Green store

Brocks at Rockwell Green store

Christie & Co

'Popular' Somerset store on the market as long-term owners retire


Brocks at Rockwell Green, a Premier-branded convenience store near Wellington, Somerset is on the market as owners Simon and Rachel Brock are now looking to retire - after running the store for nearly 25 years.

Keep ReadingShow less
Ryan Reynolds and Rob McElhenney

Ryan Reynolds and Rob McElhenney

Rob McElhenney and Ryan Reynolds announced as new co-owners of Wrexham Lager

Wrexham Lager Beer Co Ltd, the oldest lager brewery still existing in Britain that has been brewing in Wales since 1882, has announced Rob McElhenney and Ryan Reynolds as new co-owners of the company alongside the Roberts family.

The acquisition was made by Red Dragon Ventures, a joint venture formed by The R.R. McReynolds Company, majority owner of Wrexham AFC, and the Allyn family of Skaneateles, New York. Red Dragon Ventures was created to drive growth in the Wrexham community and Wrexham AFC.

Keep ReadingShow less
Solar and wind power
iStock

Leading beverage brands join forces to accelerate renewable energy adoption

Ten global beverage companies have joined forces under a new industry-wide consortium, called REfresh Alliance, which is designed to help accelerate renewable energy adoption across the industry’s supply chain.

The new initiative invites additional companies from across the beverage industry to pool and scale their resources to remove barriers to renewable energy adoption in the supply chain, provide education on best market practices and support the industry’s transition to Net Zero.

Keep ReadingShow less
disposable vapes

Single-use disposable vapes are displayed for sale on October 27, 2024 in London, England

Alishia Abodunde/Getty Images

Vape industry concerned over chancellor’s vaping duty proposal

Vape industry bodies have raised concerns over chancellor Rachel Reeves’ budget announcement introducing a flat-rate excise duty on vaping products, saying it could hurt public health and increase financial pressures on consumers.

The new excise tax, set to begin on October 1, 2026, will add £2.20 per 10ml of vaping liquid, with additional VAT. This rate replaces the previous government’s proposed tiered tax structure, which many in the industry had criticised.

Keep ReadingShow less