Living standards will keep falling, IFS warns
By politics.co.uk staff
Household incomes face a post-recessionary squeeze "for a considerable length of time", a report has warned.
The Institute for Fiscal Studies' (IFS) research said the stabilising role of state welfare systems and unusually generous increases in financial state support had helped protect households from the immediate impacts of the recent recession.
That is set to change in the coming years, it warned. IFS researches have estimated that falls in state benefits, earnings and tax credits seen in the 2010/11 financial year will lead to a fall in median net household income of 3.5%.
"The current economic downturn began more than three years ago, and may seem like old news," IFS research economist Robert Joyce said.
"But, as in other developed countries, the most severe consequences of the recession on UK living standards have only just begun to be felt, and will continue to be felt for years to come."
Britain's decline in average living standards will continue until at least 2013/14, the IFS has said, meaning the UK will have faced its worst decade since at least the Second World War.
