,

‘Third parliament of austerity’ on horizon – IFS

background-21657_1920
Austerity will last until into the 2020s, with economic growth and pay-rise levels remaining stagnant, according to the Institute for Fiscal Studies’ budget commentary.
The think-tank’s response to yesterday’s budget delivered by Chancellor of the Exchequer Philip Hammond pulled few punches on the state of the UK economy.
“On the public finances the OBR made by far its biggest ever revision to forecasts between Autumn and Spring for the current financial year,” said IFS director Paul Johnson. “In November it thought we would be borrowing £68 billion this year. It now thinks we will be borrowing just £52 billion. Yet it has barely changed its forecasts for future years. We remain on course to be borrowing about £20 billion in 2020 – that’s £30 billion more than intended a year ago. That leaves a lot of work to do in the next parliament to get to the planned budget balance. It looks like being, I’m afraid, a third parliament of austerity.”
Johnson also argued that the UK has had what amounts to “a decade without growth”, with GDP per capita rising by only 2% since 2008.

“Income and earnings growth over the next few years still look like being weak,” he said. “On current forecasts average earnings will be no higher in 2022 than they were in 2007. Fifteen years without a pay rise. I’m rather lost for superlatives. This is completely unprecedented.”

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *