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12/09/2011
UK Household Budgets Face Further Squeeze
The Institute for Fiscal Studies (IFS) has warned that household budgets could be squeezed for the next 10 years as the impact of tax rises and cuts is felt.
Its recent survey suggests families have seen the biggest fall in living standards in 30 years in the last financial year and warned that those on lowest incomes were likely to suffer a further significant reduction in their spending power.
The Treasury said plans to cut the deficit had maintained low interest rates and helped struggling families.
The IFS study also found that UK households, particularly those in the bottom half of the income distribution, had been relatively protected from the immediate impacts of the recession, partly because of state welfare systems and financial support.
But it said earnings, state benefits and tax credits had all fallen in real terms in the UK over the past year and that the pain of the recession had been delayed rather than avoided.
Research economist at IFS Robert Joyce, said: "The current economic downturn began more than three years ago, and may seem like old news.
"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."
Previous IFS research has shown that the decline in average living standards looks set to continue until at least 2013-14.
The government has been called upon to be ready to adapt given the current economic climate.
(JG/CD)
Its recent survey suggests families have seen the biggest fall in living standards in 30 years in the last financial year and warned that those on lowest incomes were likely to suffer a further significant reduction in their spending power.
The Treasury said plans to cut the deficit had maintained low interest rates and helped struggling families.
The IFS study also found that UK households, particularly those in the bottom half of the income distribution, had been relatively protected from the immediate impacts of the recession, partly because of state welfare systems and financial support.
But it said earnings, state benefits and tax credits had all fallen in real terms in the UK over the past year and that the pain of the recession had been delayed rather than avoided.
Research economist at IFS Robert Joyce, said: "The current economic downturn began more than three years ago, and may seem like old news.
"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."
Previous IFS research has shown that the decline in average living standards looks set to continue until at least 2013-14.
The government has been called upon to be ready to adapt given the current economic climate.
(JG/CD)
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Drop in average incomes reported
Average household incomes have dropped for the first time since the recession in the early 1990s, a report by the Institute of Fiscal Studies (IFS). The report found that household incomes after tax and benefits fell by 0.2% in real terms between 2002/03 and 2003/04, falling to £408 per week in 2003/04 prices.
Drop in average incomes reported
Average household incomes have dropped for the first time since the recession in the early 1990s, a report by the Institute of Fiscal Studies (IFS). The report found that household incomes after tax and benefits fell by 0.2% in real terms between 2002/03 and 2003/04, falling to £408 per week in 2003/04 prices.
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Northern Ireland WeatherToday:After a dry start this morning rain will spread from the northwest across all parts. This afternoon will be dull with some patchy rain and drizzle. Becoming much milder through the afternoon. Maximum temperature 11 °C.Tonight:A cloudy evening and night with a little light rain or drizzle, perhaps some clear periods developing along the east coast. A very mild night everywhere. Minimum temperature 10 °C.
