To ask His Majesty's Government, given the projection by the Organisation for Economic Co-operation and Development (OECD) that the UK will be the second weakest performer of the world's big economies in 2023, what assessment they have made of the impact of this economic downturn on standards of living for people in the UK.
Answered on
12 December 2022
HM Treasury does not prepare formal forecasts for household income or the outlook for the UK economy, which are the responsibility of the independent Office for Budget Responsibility (OBR).
In their November 2022 Economic and Fiscal Outlook, the OBR expects living standards – as measured by real household disposable income (RHDI) per capita – to fall by 4.3% in 2022/23 and 2.8% in 2023/24, and to start recovering from Q4 2023.
The government has announced further support for next year designed to target the most vulnerable households alongside capping energy bills for all households through the Energy Price Guarantee. This cost of living support is worth £26 billion in 2023-24, in addition to benefits uprating, which is worth £11 billion to working age households and people with disabilities. This support for 2023-24 is in addition to the generous support already in place to support households this winter. In addition to the Energy Price Guarantee, the government announced £37 billion of support for the cost of living in 2022-23.
The OBR estimated that government support helps offsets half of the fall in RHDI per person that would have otherwise occurred in 2022/23, and around a quarter of the cumulative fall between 2021/22 and 2023/24.