Spring Statement 2022: UK to face biggest fall in living standards since records began

2.2% fall in 2022-23

As Chancellor Rishi Sunak made his Spring Statement this afternoon, the Office for Budget Responsibility announced that inflation and tax rises will cause living standards to fall by 2.2% in 2022-23, the greatest fall since records began in 1956.

Sunak warned in his speech that the OBR report had not accounted for the full impact of the Russian invasion of Ukraine and "we should be prepared for the economy and public finances to worsen, potentially significantly". After news this morning that inflation hit 6.2% in February, the OBR said today that it expects inflation to average 7.4% this year. The Bank of England had previously warned that inflation could reach as high as 8%, but the OBR now sees inflation hitting a 40-year high of 8.7% in the fourth quarter of this year. Inflation is then predicted to fall to 4% in 2023 a...