In its analysis of the recent Autumn Statement, think tank the Resolution Foundation suggested that workers in the UK are currently living through a two-decade-long wage stagnation costing them £15,000.
The Resolution Foundation stated that Chancellor Jeremy Hunt’s Autumn Statement ‘piled further pressure on the squeezed middle’ with rises in personal taxes that are set to deliver a permanent 3.7% income hit to UK households.
It also said that a weaker forecast for pay as published by the Office for Budget Responsibility (OBR) means that real wages are not expected to return to their 2008 level until 2027. According to the Resolution Foundation, had wages continued to grow at their pre-crisis rate during this unprecedented pay downturn, they would be £15,000 a year higher.
James Smith, Research Director at the Resolution Foundation, said: ‘As an energy importer during an energy price shock, Britain is getting poorer. Deciding how we do so was, to a significant extent, the choice facing the Chancellor.
‘He has decided that households will do so with higher energy bills, higher taxes and worse public services than previously expected. Whether or not making the choices was tough, the reality of living through the next few years will be.’