THE UK is suffering the worst decline in living standards of any G7 country, according to new TUC analysis. The analysis shows the UK is the only G7 economy where real household disposable income per head has not recovered to its pre-pandemic levels.
Real household disposable incomes in the UK were 1.2 per cent lower in the second quarter of 2023 than at the end of 2019. But over the same period they grew by 3.5 per cent, on average, across the G7. The TUC estimates that if real disposable income in the UK had risen in line with the G7 average, UK families would be £750 a year better off.
The union body warned that the contraction in UK household budgets is going to get worse despite falling inflation.
The Office for Budget Responsibility (OBR) forecasts that real house disposable income per head in Britain will fall by an additional 3.4 per cent by the end of the first quarter of 2024. And according to the same forecasts, household budgets will not even recover to their pre-pandemic levels until the end of 2026.
The OBR said in November that UK households are suffering the worst period for living standards since modern records began in the 1950s.
The TUC says the Conservatives’ failure to grow the economy and deliver healthy wage growth has pushed many households further into debt. Analysis published by the union body at the end of December revealed that unsecured debt (credit cards, loans, hire purchase agreements) is set to rise by £1,400 per household, in real terms, this year.
The TUC says working people have been left brutally exposed to rising costs after years of pay stagnation, and estimates that the average worker has lost £14,800 since 2008 as a result of their pay not keeping up with pre-global financial crisis real wage trends.
Paul Novak, TUC General Secretary. said: “The UK is the only G7 nation where living standards are worse than before the pandemic. While families in other countries have seen their incomes recover – household budgets here continue to shrink. This is a damning indictment on the Conservatives’ economic record.
“Their failure to deliver decent growth and living standards over the last 13 years has left millions exposed to skyrocketing bills – and is pushing many deeper into debt. We can’t go on like this. Britain cannot afford the Tories for a day longer.”
* Source: Trades Union Congress