Budget to hit living standards in short-term, think tank says

Published On Oct 31, 2024, 2:00 AM

The Resolution Foundation reports that the recent UK Budget is expected to negatively impact living standards in the short term due to increased taxation and borrowing aimed at funding public services. While the government seeks to promote long-term economic growth, the immediate effects include a decrease in disposable income for low-to-middle income families and a reduced outlook for wage growth and economic expansion. The poorest households are projected to face a 0.8% cut in annual income on average, while wealthier households may see a 0.6% decline. The foundation warns of challenges to real wage growth in the coming years, with a slim margin for fiscal adjustments in the aftermath of increased spending on services. Overall, while there are investments in health and public services, the fiscal strategy may necessitate further tax increases in response to economic downturns.