People in UK will suffer from severe fall in living standards: Report

People in the UK will face the after-effects of a severe fall in living standards caused by surging inflation, which will leave millions struggling to pay their bills, academic researchers forecast on Wednesday.

Britain's National Institute for Economic and Social Research (NIESR) cut its forecast for gross domestic product growth this year to 0.2% from 0.7% in its last forecast in November, and sees growth of 1.0% in 2024, down from 1.7%.

NIESR Director Jagjit Chadha said the forecasts painted "an incredibly depressing picture", particularly for living standards which are set to stagnate this year after falling sharply last year due to the surge in energy prices.

One in four British households would be unable to pay for food and energy without using up savings, borrowing or seeking other help in the 2023/24 financial year, up from one in five during the current year, NIESR said.

Overall, most Britons needed to accept that their incomes had fallen in real terms and could not be easily made up by higher pay, Chadha said - echoing a message from the Bank of England last week when it raised interest rates to a 14-year high of 4% to tackle inflation that is still above 10%.

Middle income households faced a fall in real income of up to 13% or 4,000 pounds ($4,800) during the year to the end of March 2023, NIESR said.

Reuters

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