Forecasts show poor will suffer if there’s no change in economic policy
FIVE YEARS of income stagnation and widening inequality are on the table if Tory policies continue, the Institute for Fiscal Studies (IFS) think tank forecasted yesterday.
An IFS report projected a “spectacularly poor” period for incomes over five years, with no real-terms growth over the next two years, and only “modest” improvements in the following three.
Wages and benefits in 2021- 22 will be more than 15 per cent below what would have been expected if growth rates had continued after the 2008 bankers’ crash, it calculated. That equates to a loss of £5,000 a year for the average household.
Such stagnation would put incomes further behind trend than they have been for at least 60 years, the IFS report added.
Any increases in income will be enjoyed mostly by the rich, with the top 20 per cent of households projected to receive an overall boost of around 5-7 per cent over the next five years.
At the same time, the bottom 20 per cent is projected to be worse off, largely due to benefit cuts.
The report also predicted a rise in absolute child poverty, taking it back to the levels of the early 2000s.