{"text":[[{"start":0,"text":"UK households will end the decade virtually no better off than at the start of the pandemic, according to official forecasts that undercut chancellor John Healey’s Budget efforts to provide “breathing space”."}],[{"start":19.021,"text":"The Office for Budget Responsibility expects real household disposable income per person — a measure of living standards — to be just 1 per cent higher than its pre-pandemic level in 2029-30."}],[{"start":30.881,"text":"In a sharp downgrade from its March forecasts, the fiscal watchdog said RHDI would fall outright in the near term, with weak growth in subsequent years compounding the “grim” outlook."}],[{"start":43.2,"text":"“It’s been a dismal period in British economic history,” said David Miles, a senior OBR official, noting that growth over the decade would average just 0.1 per cent a year — the most brutal outcome in records stretching back to the 1950s."}],[{"start":57.172,"text":"Growth rates of 2 per cent a year were typical before the 2008 global financial crisis."}],[{"start":null,"text":"
"}],[{"start":62.387,"text":"Higher energy prices were the main reason the OBR had cut the immediate outlook, Miles said, but tax increases announced in previous Budgets, in particular the freeze in personal tax thresholds, are also adding to the pressures."}],[{"start":76.64,"text":"Miles said that by the end of the forecast period taxes would have increased in “the order of 6 per cent of GDP” compared with before Covid."}],[{"start":84.72,"text":"The grim outlook for households is striking, given the OBR has not made any major change to its forecast for GDP in the medium term."}],[{"start":92.8,"text":"It expected GDP to grow 1 per cent in 2027, a downgrade from its previous expectations, but this is from a stronger starting point that it said reflects a “structural” improvement."}],[{"start":104.56,"text":"The OBR’s forecast for potential growth is unchanged, reflecting recent resilience in activity and an improved picture for business investment, offsetting the drag from lower net migration."}],[{"start":114.917,"text":"However, workers have lost bargaining power in a weak jobs market and will not be able to demand higher pay to offset the rise in inflation, the OBR said."}],[{"start":126.16,"text":"It expects no real-terms gains in earnings in 2027 or 2028, with real wage growth recovering to just 0.5 per cent in 2030 as companies rebuild profit margins."}],[{"start":null,"text":""}],[{"start":134.24,"text":"Ruth Curtice, chief executive at the Resolution Foundation think-tank, said the forecasts reflected “what is set to be a truly terrible decade for living standards”."}],[{"start":143.44,"text":"She criticised the chancellor’s cost of living measures in Wednesday’s Budget, saying help with energy bills was “badly targeted” and would be “literally cold comfort” for low-income families facing a much bigger increase in their bills than the help offered."}],[{"start":158.4,"text":"A fifth of low-income households in London and the south-east would miss out."}],[{"start":163.92,"text":"The 2020s were now expected to bring “twice the inflation of a normal decade,” the foundation noted, with the OBR’s forecasts showing prices rising by 42 per cent, compared with 22 per cent if inflation had stayed at the 2 per cent target."}],[{"start":177.913,"text":"Helen Miller, director of the Institute for Fiscal Studies, also said the “breathing space” package was “relatively small” and relied on an “outdated” council tax system to give a £100 one-off payment to four-fifths of households in England — rather than targeting those with low incomes."}],[{"start":193.71,"text":"The outlook for households could have been worse, however — as the OBR’s forecasts are based on market expectations for energy prices in early August, before recent steep increases. They show inflation peaking at 3.8 per cent early next year and returning to 2 per cent in mid-2028."}],[{"start":211.082,"text":"The OBR said its forecast for inflation next year would have been higher if based on current pricing, but that “it is not obvious the fiscal forecast would be substantially worse” as inflation pushes up revenues as well as spending."}],[{"start":224.24,"text":"The fiscal watchdog has not changed its forecast for long-run productivity growth, which it downgraded last year."}],[{"start":231.164,"text":"Miles said a recent data revision by the Office for National Statistics, showing that productivity growth was stronger than thought and working hours lower in the run-up to the pandemic, “doesn’t do anything to improve what has been a dreadful period of very low growth in GDP per capita”."}],[{"start":248.88,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1793251519_2689.mp3"}