OBR warns of stagnant living standards and rising inflation in Britain
What happened
The Office for Budget Responsibility stated that Britain faces a "grim" decade of stagnant living standards. Professor David Miles noted that real household disposable income is expected to shrink next year due to a rising tax burden and high inflation caused by the Iran war. The OBR also lowered growth forecasts to 1% next year and raised average inflation projections to 3.4%.
From cityam.com
Why it matters
The outlook suggests that family budgets will only be 2% higher in 2030 compared to pre-pandemic levels. This negative forecast was presented alongside a Budget that raised taxes on banks, savers, and landlords.
From cityam.com
Who's involved
- David MilesORB economist who commented on the poor state of living standards
- Lloyds Banking GroupBritish financial institution subject to tax increases in the Budget
- BarclaysBritish bank subject to tax increases in the Budget
- Confederation of British IndustryUK business organization affected by economic outlook
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- NFUSpeculative
Might face increased costs for agricultural inputs due to high inflation.
- Lloyds Banking GroupSpeculative
Could see reduced profitability and revenue from tax increases on banks.
- BarclaysSpeculative
Could see reduced profitability and revenue from tax increases on banks.
- Confederation of British IndustrySpeculative
May experience dampened business investment due to the rising tax burden and lower growth forecasts.
- TescoSpeculative
Could see reduced consumer demand due to shrinking disposable income and high inflation.
- British Retail ConsortiumSpeculative
May see reduced consumer demand due to shrinking disposable income and high inflation.
Possible ripples
Who this could reach next, traced step by step from the reporting. Possibilities worth considering, not forecasts.- Ministry of Defence may face funding uncertainty amid fiscal holeMinistry of Defence faces funding uncertainty amid fiscal holePossible
- CBI warns rising taxes and low growth threaten business investmentThe Confederation of British Industry warns rising taxes and low growth threaten business investmentPossible
- Tesco may face reduced demand as household incomes shrinkShrinking household income could reduce consumer demand for Tesco.Possible
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The entities involved
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David Miles
researcher (ORCID 0000-0002-6387-0041)
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