Fall in living standards.ushered in as Hunt delivers 'grim' economic outlook

Britain is facing the sharpest fall in living standards for generations, as the chancellor confirmed the UK is now ina recession expected to last until 2024.

- ANDREW WOODCOCK ROB MERRICK

In an autumn statement designed to rein in inflation and restore financial stability, Jeremy Hunt deployed stealth taxes totalling 25bn, and 30bn of cuts to public services, to fill a 55bn gap in the government’s books.

He also set a course for austerity in public services like police, transport and local government, providing no extra cash to offset soaring inflation for the next three years and slashing expected increases in the following three by 36bn. In a bleak assessment of the country’s prospects, the Office for Budget Responsibility said a 7 per cent slump in household incomes will wipe out the gains of the last eight years and leave voters poorer at the next election than they were the last time they went to the ballot box in 2019.

The overall tax burden will reach its highest since the Second World War in 2024, while unemployment will rise by more than 500,000 to reach a peak of 4.9 per cent, said the government’s official forecaster. Describing the chancellor’s package as sombre”, the director of the Institute for Fiscal Studies, Paul Johnson, said: The next few years look grim in terms of living standards, the biggest reduction in household incomes, possibly on record and certainly within recent generations.”

“Painful” interest payments on state debt are at their highest since 1948 at 4.8 per cent of GDP and will soon top 100bn a year, more than spending on any public service apart from the NHS, he said. Unveiling his statement in the House of Commons, Mr Hunt blamed soaring energy prices and the war in Ukraine for a recession made in Russia”.