Millions of Britons Face Poverty: Study
Households in Britain will see their purchasing power reduced by an average of £3,000 ($3,471) by the end of next year, according to research from the think tank Resolution Foundation, which was cited by The Guardian.
The study indicated that rising energy costs would result in a 10% reduction in household incomes nationwide and an additional 3 million people falling into poverty.
The think tank warned that the outlook for living standards was "shocking" and "terrifying," noting that without significant government assistance, the decline in the typical household's income would be worse than the 8% decline that followed the oil price shock of the 1970s and twice as severe as that experienced during the global financial crisis.
“No responsible government could accept such an outlook, so radical policy action is required to address it,” Resolution Foundation researcher Lalitha Try wrote, adding: “We are going to need an energy support package worth tens of billions of pounds, coupled with increasing benefits next year by October’s inflation rate.”
The researcher warned of the biggest drop in UK living standards in at least a century as prices were rising faster than wages.
The report projected that inflation-adjusted average incomes would continue falling until at least the middle of 2023, taking real earnings back to their levels of 2003. Living standards are on course to slide by 5% in the current 2022-23 financial year and by a further 6% in 2023-24. Such a decline has not been seen in Britain since World War Two, it said.