UK households poorer than before pandemic: unions | Business
The United Kingdom is the only G7 country where household budgets have not recovered to pre-Covid levels, trade union body the TUC said on Monday.
While families in other countries have seen their incomes recover — household budgets here continue to shrink, said TUC general secretary Paul Nowak.
The situation has left millions exposed to skyrocketing bills, pushing many Britons deeper into debt, he added.
According to the TUC, household disposable revenue in real terms was 1.2 percent lower at the end of Q2 of 2023 than at the end of 2019. In comparison, disposable income grew by 3.5 percent on average across G7 countries during the same period.
The TUC estimates that if British households saw the same level of growth as their G7 counterparts, they would receive an additional £750 ($953) per year.
However, the UK has been grappling with high inflation, which peaked at just over 11 percent, and has remained stubbornly high. This has squeezed household incomes, especially with the rising energy prices caused by Russia’s war in Ukraine. Although inflation has eased to 3.9 percent year-on-year in November, food inflation remains high.
The TUC warns that contraction in UK household budgets will worsen despite falling inflation. It estimates that household budgets won’t even recover to their pre-pandemic levels until the end of 2026, in line with forecasts from the government’s fiscal watchdog, the Office of Budget Responsibility.
The OBR had previously stated that between 2019 and 2025, the UK would experience its greatest reduction in real living standards since official statistics began in the 1950s.
TUC general secretary Paul Nowak expressed his disappointment with the ruling Conservative party, holding them responsible for the situation. The party, which has been in power since 2010 and is seeking a fifth term of office at a general election later this year, has faced criticism for failing to address the shrinking household budgets adequately.
In response, a finance ministry spokesperson highlighted the government’s efforts to support households, emphasizing expectations of lower rates of inflation, tax cuts, and initiatives such as increases to the minimum wage.
The TUC’s findings shed light on the challenges faced by UK households, with many struggling to make ends meet and facing increasing levels of debt. The impact of the pandemic, coupled with inflation and rising energy prices, has put significant strain on family finances.
The situation calls for urgent attention and effective policy measures to address the growing economic disparity within the country. As the UK continues to navigate post-pandemic recovery, restoring household budgets and improving living standards must be prioritized.
The TUC’s report serves as a stark reminder of the long-lasting consequences of the pandemic and highlights the need for targeted support to uplift vulnerable households and ensure a more equitable economic future for all. It is essential for the government and policymakers to take swift action to reverse this trend and create conditions that enable families to thrive.
