Spring Budget 23: OBR maintains forecast of sharpest drop in living standards since 1950s

Average 6.1% inflation in 2023

The Office for Budget Responsibility has projected that living standards are expected to fall by 6% over the next two fiscal years as inflation outstrips income growth.

The drop in real household disposable income per capita, a measure of living standards, is less than the 7% fall expected in November, but will still represent the largest two-year fall since records began in the 1950s. When the OBR closed its forecast on 8 February, it foresaw the terminal Bank of England interest rate at 4.25% later this year, compared to 5%, as had been assumed in November. Spring Budget 23: Hunt unveils measures to tackle UK's labour shortage in bid to boost growth This was largely due to the increasingly positive outlook for inflation, as the OBR predicted inf...