Pressure on the government to help struggling Britons has intensified after a leading thinktank warned that falling living standards for the poor threatened the biggest rise in inequality since Margaret Thatcher was prime minister.
The Resolution Foundation said Theresa May would need to make good on her pledge to support “just about managing” households as it released a reportshowing that rising inflation and an end to recent strong jobs growth would hit the least well-off hardest.
Its warnings chime with other forecasts for a squeeze on family budgets on the back of sluggish wage growth, welfare cuts, rising global oil prices and the pound’s sharp fall since the Brexit vote. The drop in sterling has made imports more expensive and there are already signs that is being passed on to consumers, with inflation hitting its highest level for more than two years in December.
The Resolution Foundation’s study found that the current parliament would be the worst for living standards for the poorest half of households since comparable records began in the mid-1960s and the worst since the early years of Thatcher’s 1979-90 premiership for inequality.
Since its sharp increase in the early 1980s – a period of high unemployment, factory closures and a cut in the top rate of tax from 83% to 60% – inequality has broadly remained flat.
But the Resolution Foundation forecast that between 2015 and the next general election in 2020 incomes for the poorest half of households will fall by 2%
