UK households have £10,700 wiped from bank account in cost of living blow

According to a major report from the Resolution Foundation and the London School of Economics’ Centre for Economic Performance, UK living standards are falling behind comparable rich nations.

UK workers are missing out on £10,700 a year after more than a decade of weak economic growth and high inequality, a new study has found. According to a major report from the Resolution Foundation and the London School of Economics’ Centre for Economic Performance, UK living standards are falling behind comparable rich nations.

A living standards gap worth £8,300 had opened up between typical households in Britain and their average peers in Australia, Canada, France, Germany and the Netherlands, the report found. A spokesperson for the Treasury said the Office for Budget Responsibility was forecasting the autumn statement to deliver the “largest boost to potential growth on record” after Chancellor Jeremy Hunt's speech last week.

“We have halved the number of people on low pay with increases to the ‘national living wage’ and, thanks to above-inflation increases to tax allowances, we have also saved the average earner over £1,000 a year since 2010,” they said. Torsten Bell, the chief executive of the Resolution Foundation, said: “The task facing the UK is to urgently embark on a new path.

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A new economic strategy built not on nostalgia or wishful thinking but our actual strengths, along with honesty about the scale of change needed and the trade-offs involved. It’s time for Britain to start investing in our future, rather than living off our past.”

The Resolution Foundation and LSE’s report found that existing plans for reversing decline were “not serious” and had been founded in the belief that “‘world-beating’ rhetoric automatically translates into a ‘world-beating’ reality” .In a speech at the launch of the Resolution Foundation and LSE’s Economy 2030 Inquiry report on Monday, Keir Starmer will say that firing up Britain’s economy will have to “become Labour’s obsession” in government to reverse years of Tory mismanagement.

He will also say: “Anyone who expects an incoming Labour government to quickly turn on the spending taps is going to be disappointed."