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| Britain's debt will not fall to 2008 levels until 2060s, IFS says in startling warning | Britain's debt will not fall to 2008 levels until 2060s, IFS says in startling warning |
| (35 minutes later) | |
| Britain's debt levels will not fall below pre-crisis levels until the 2060s if growth does not improve, the head of the Institute for Fiscal Studies (IFS) has said in a critical assessment of the Budget. | Britain's debt levels will not fall below pre-crisis levels until the 2060s if growth does not improve, the head of the Institute for Fiscal Studies (IFS) has said in a critical assessment of the Budget. |
| IFS Director Paul Johnson said workers were facing two "lost decades" without earnings growth following Philip Hammond's statement yesterday. | IFS Director Paul Johnson said workers were facing two "lost decades" without earnings growth following Philip Hammond's statement yesterday. |
| Despite a £25bn giveaway for housebuilding, tech and the NHS, the IFS said the Budget did not mark the end of the "age of austerity" as it pointed out that other public services outside the NHS will still face 7 per cent cuts in day-to-day spending over the next five years. | |
| Delivering the IFS' post-Budget analysis, Mr Johnson said: “The sort of modest growth rates currently expected imply that if we were to maintain the deficit at the just over 1 per cent of national income projected for the early 2020s, it would take us well past the 2060s for debt to fall to its pre-crisis levels of 40 per cent of national income. | |
| “That assumes no recessions for the next half century.” | “That assumes no recessions for the next half century.” |
| Grim official forecasts from the Office for Budget Responsibility imply that GDP per head will be 3.5 per cent lower in 2021 than was forecast less than two years ago, equating to a £65 billion hit to the economy, he said. | |
| And average earnings in 2021 look set to be nearly £1,400 lower than forecast in March 2016 - lower in real terms than at the time of the financial crash in 2008. | And average earnings in 2021 look set to be nearly £1,400 lower than forecast in March 2016 - lower in real terms than at the time of the financial crash in 2008. |
| Mr Johnson added: "We are in danger of losing not just one but getting on for two decades of earnings growth." | Mr Johnson added: "We are in danger of losing not just one but getting on for two decades of earnings growth." |
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