Of course, UK households are experiencing the deepest decline in living standards in a century, with real household disposable income expected to fall by 10 per cent this year and next.
The warning made in a new report by the Resolution Foundation says real incomes are falling at their fastest rate since 1997, meaning that by the middle of next year, food growth since 2003 will be erased. book.
A 10% drop in disposable income would equate to £3,000 for a typical household, bringing the absolute number of poor people up from three million to 14 million.
Meanwhile, the relative poverty rate among children is projected to reach 33% by 2026-27 – the highest level since the 1990s – according to the report, At the End: The Living Standards Crisis. face the new Prime Minister.
Concerns about child poverty were echoed by a brief notice sent to the Scottish parliament from Save The Children Scotland this week, which said Holyrood and Westminster needed to take urgent action to help. help the poorest families.
Fiona King, the charity’s policy manager, said: “We’re all worried about the rising cost of living but it doesn’t affect us all equally.
“For many of the families we work with, there is no cost-cutting measure, there’s simply nothing left to cut.
“We cannot overstate the simple fact that the coming months will be disastrous for families and especially children, who will be cold and hungry this winter, if urgent action is not taken. do it now.”
More support could ‘radically reduce’ the problem households are facing
The Settlement Fund’s report took into account the latest forecasts from the Bank of England and the £30 billion in policy support announced since March.
UK inflation rate hits 40-year high in July – latest figures available – reaching 10.1% annuallyup from 9.4% in June.
One of the main factors driving the increase is energy bills, which will increase by about 80% since October when the latest price cap went into effect.
Read more:
Food prices rose in August at fastest pace since 2008
Energy bills rise to millions as price cap rises to £3,549
Explainer: Everything you need to know about higher bills
Analysis: Even those who did the right thing will not escape the impact of rising energy bills
The report says further support to help people pay their energy bills, through social tariffs, universal bill reductions, price caps or further targeted support, would cost tens of billions of pounds. England, but will “radically reduce” the problem that short and medium people are facing. income households.
Keeping up with the prime minister’s previous promise to increase subsidies next year in line with September’s inflation rate is also “necessary” to protect poorer households, the report said. adds that it would be further improved if October’s inflation numbers were used instead.
‘Honestly scary’
Lalitha Try, a research fellow at the Resolution Foundation, said that high inflation is likely to stay with us for many years to come, meaning the outlook for living standards is “really scary”.
“The typical household will of course see their real income drop by £3,000 over the next two years – the biggest drop in at least a century – while an additional three million could fall into poverty. absolute.
“No responsible government can accept such a scenario, so radical policy action is needed to address it.
“We’re going to need an energy support package worth tens of billions of pounds, along with an increase in benefits next year to October’s inflation rate.
“The new prime minister also needs to improve Britain’s long-term outlook, which can only be achieved with a new economic strategy that delivers higher productivity and strong growth.”
Other cost-of-living warnings on Thursday include:
• Around 400,000 UK households are not protected by energy price caps and need urgent help, according to the National Housing Federation
• High fuel costs, rising poverty and government inaction could lead to a “significant humanitarian crisis with millions of children with developmental disabilities”, according to the UCL Institute for Health Equity.
• Hospitals are bracing for a huge increase in energy costs, according to the BMJ, says Leeds Teaching Hospitals NHS is expected to pay an extra £2m a month from next year, says Hospitals University of Nottingham sets NHS budget to increase 214%, and Great Ormond Hospital Street in London expects costs to nearly double
