Began, with family finances grim, says think-tank

mother of all economic downgrades pushing up borrowing for the Treasury.

“While Philip Hammond chose to take a relaxed approach to additional borrowing, families are unlikely to do so when it comes to the deeply troubling outlook for their living standards that the Budget numbers set out.

“Families are now projected to be in the early stages of the longest period of continuous falls in disposable incomes in over 60 years – longer even than that following the financial crisis.

“On the substance of the Budget, the Chancellor has made the right call in boosting housing investment and focusing on this key issue of intergenerational concern.

“However, yesterday’s stamp duty rabbit is in reality a very poor way to boost home ownership. Its £3 billion cost could have been better spent building 140,000 new homes through the government’s own Housing Investment Fund.

“Faced with a grim economic backdrop the Chancellor will see this Budget as a political success. But that would be cold comfort for Britain’s families given the bleak outlook it paints for their living standards.

“Hopefully the OBR’s forecasts will prove to be wrong, because while the first sentence of the Budget document reads ‘the United Kingdom has a bright future’, the brutal truth is: not on these forecasts it doesn’t.”

The think-tank’s analysis suggested that tax and benefits measures announced by Mr Hammond and his predecessor, George Osborne, since 2015 will hit the poorest households.

“The poorest third of households will be on average £715 a year worse off by 2022-23, while the richest third will be an average of £185 a year better off,” the report said.

Liberal Democrat leader Sir Vince Cable said: “The squeeze on pay and living standards is set to carry on until 2025, made worse by higher inflation since the Brexit vote.

“Meanwhile, the Conservatives’ poor management of the economy means the budget will not be balanced until at least the 2030s.

“This was a regressive budget that maintained the deepest of the Conservatives’ welfare cuts, hitting the poorest third of households hardest.”