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A British think tank has warned that over three million more Britons will fall into absolute poverty by the end of 2024 unless the new government acts quickly.
Resolution Foundation, in its latest report, projected households will see their spending power cut by an average of £3,000 by the end of the year, and a tough winter is expected as energy bills hit £500 a month.
It also warned that real pay growth is falling at its fastest rate since 1997 and by the middle of next year real pay growth since 2003 will be “wiped out”.
Lalitha Try, a researcher at the Resolution Foundation, warned Britain is entering “the biggest squeeze in at least a century” and called on the new government to take action by administering an “energy support package worth tens of billions of pounds, coupled with increasing benefits next year by October’s inflation rate.”
Last week, the Office of Gas and Electricity Markets (Ofgem) revealed a distressing 80 percent hike in electricity and gas bills, bearing testimony to the country’s exacerbating cost of living crisis.
Noting that the price hike would have a “massive impact” on households across the country, Ofgem CEO Jonathan Brearley warned of yet another likely increase in January, reflecting significant pricing pressure in energy markets.
The report warned of the consequences facing children growing up in cold homes due to high fuel costs and noted child poverty will reach its highest level in the past 30 years hitting 33 percent by 2027.
The report stated that the next prime minister’s time in the office looks set to be dominated by the “terrifying” prospect of the “biggest squeeze in living standards for a century”.
It suggests that the British government provides additional support with energy bills while increasing Universal Credit every April and October in periods of very high inflation.
The report stated a long-term solution to improve the country’s medium-to-long-term economic outlook would be to significantly improve living standards through a comprehensive new economic strategy.
In response to the report, a Government spokesperson told Birmingham Live, “We are continuing to support the economy and families through tax cuts and £37 billion worth of help for households throughout the year, including direct payments of at least £1,200 for eight million of the most vulnerable households.”
Meanwhile, Britain’s government has been paralyzed by the race to replace Boris Johnson as prime minister next week.
In the Tory Party leadership contest for Britain’s next prime minister, both front-runner Liz Truss and her rival Rishi Sunak are struggling with how to respond to the energy crisis.
Britain is already suffering from its highest inflation rate since 1982 and is predicted to enter a recession later this year.
