UK has 'five more years of stagnant living standards at best' - IFS Director

27 October 2021, 16:01 | Updated: 27 October 2021, 16:10

IFS Director on budget: Austerity has 'definitely ended'

By Tim Dodd

Institute for Fiscal Studies Director Paul Johnson has told LBC it's going to be "at least half a decade of stagnant living standards at best" for the UK, following the Chancellor's budget announcement today.

Mr Johnson's comments come after Chancellor has revealed his Autumn 2021 Budget to MPs, warning of "challenging months ahead," post Covid-19.

Shelagh Fogarty asked of today's Budget announcement: "Was it, without any explicit reference to austerity, the moment austerity ended?"

"Well, you could date that at, you know, a year ago, or two years ago, or three years ago," said Mr Johnson.

"I think it's certainly the moment where we can say it's definitely ended, or there's not a trace of austerity happening at the moment."

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Shelagh suggested that "traces" of austerity are visible across UK communities today.

Former Shadow Chancellor John McDonnell reacts to the budget

Mr Johnson replied: "The effects are still there because the level of spending in some areas is still down, but it's moving in a different direction now.

"We're also still seeing the impact of the financial crisis of more than a decade ago, because our living standards have barely improved in all that time which is just dreadful in historical context.

"And if you look in the Office of Budget Responsibility document this year, they reckon they're not going to increase again, still, for the next five years - inflation being high, taxes going up, growth being low. It's going to be another at least half a decade of stagnant living standards at best."

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