The UK is facing the biggest drop in living standards since records began, according to a report. On average, the UK has seen its living standards fall by 8% since 2008. In addition, the Office for National Statistics (ONS) data shows that British workers are worse off than their counterparts in Europe and North America on income, hours worked, and unemployment. The ONS also found that wages have fallen considerably quicker than prices over the same period. In fact, inflation in Britain is only 0.6% higher than it was back in 2007-2008 when it was recorded at 4.5%.
The ONS also found that average household incomes were £200 a month lower in 2014 than they were in 2007. This is the biggest fall since records began over a century ago. However, a new analysis by the Resolution Foundation thinks tank found that with rising prices, it could take an average UK family decades to return to their pre-recession income levels.
In addition, it says that living standards have fallen by 8% across the UK since 2008, which is lower than the EU and US performance since 2007.
Alan Clarke, a Senior Economic Analyst at the Resolution Foundation, said: "This report shows how years of weak growth have damaged people's buying power as wages have fallen while prices have risen." The country's economic output per person has fallen by 10% over the past five years, worse than any other nation in Europe and only surpassed globally by countries like Libya and Yemen.
An analysis by the Centre for Economic Performance (CEP) at the London School of Economics and Political Science (LSE) found there had been a "permanent loss" of 3% due to years of sluggish growth. Mr. Clarke said: "Britain's living standards have fallen by 8% since 2008, much more than the rest of the developed world, and parts of Britain have seen a more serious decline than other parts."
"While much of this is due to lower wages—average monthly earnings are £200 lower now than they were 12 years ago—prices have risen much faster, leaving many families worse off today."
"That means it will take an average UK family decades to get back to their pre-crisis income levels."
When the government publishes new tax and spending plans on Thursday, there will be more pressure on it to do more to help the country's cost-of-living crisis as the country's inflation rate hit a 41-year high in October.
In the 12 months ending in October, consumer prices increased 11.1%, compared to a 10.1% increase in September, the Office for National Statistics reported on Wednesday. The new percentage was higher than the 10.7% economists had predicted.
According to the ONS, higher food and energy prices caused Britain's inflation rate to reach its highest level since October 1981. It tops both the 7.7% U.S rate, which dropped in October and the record 10.7% inflation seen last month in the 19 European nations that use the euro.
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