NEW from @jrf-uk.bsky.social
Much has been made of the pressure on public finances.
Household finances remain the elephant in the room.
If OBR adjust their Mar forecast in line with the BoE in Feb, it will see the average family £1,400/yr worse off by 2030, compared with today.
Thread.
Much has been made of the pressure on public finances.
Household finances remain the elephant in the room.
If OBR adjust their Mar forecast in line with the BoE in Feb, it will see the average family £1,400/yr worse off by 2030, compared with today.
Thread.
Comments
1. Interest rates are high (up from October), reducing employment, constraining earnings, and feeding through to higher housing costs.
2. Inflation (also up) outstripping earnings growth.
3. Frozen tax thresholds sees % tax in earnings rise.
1. Housing costs rising faster than inflation; mortgages up £1300/yr, rents £300/yr by 2030 (green).
2. Inflation rising faster than earnings; real earnings down £700/yr (dark blue).
3. Real tax constant despite lower earnings, (light blue).
The poorest third could see their incomes fall twice as fast compared with the middle and the top, 2025-30.
They are disproportionately effected by job losses, rising housing costs and falling real benefit income (even before disability cuts).
Just four months ago the Prime Minister announced a milestone for rising living standards, "so working people have more money in their pocket".
https://www.theguardian.com/politics/live/2024/dec/05/keir-starmer-pledges-labour-government-delivering-change-uk-politics-live
Unlike our preferred measure, their RHDI is gross of housing costs. But even with these wished away the picture is bleak.
Their measure may still come through as positive next week, depending on a number of factors. We will see.