UK Faces Slow Growth, Falling Incomes and Record Tax Burden While Battling Economic Threats
• Growth forecasts for 2023 and beyond slashed - UK growth next year forecast at just 0.7%, down from 1.8%, with lower growth also expected in 2025 and 2026.
• Households face biggest squeeze in living standards since 1950s - Real household disposable income per head forecast to fall 3.5% by 2024-25 compared to pre-pandemic.
• Tax burden hitting new high despite NI cut - Tax take will reach a new post-war peak, even with the National Insurance cut. Higher thresholds dragging millions into higher bands.
• Economic threats remain - Recession still a risk as business investment expected to fall in near term. High inflation and interest rates also a continued drag.
• Public finances remain fragile - Debt above 90% of GDP for 5 more years. Any economic shock could wipe out the small £13 billion fiscal headroom.