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UK worst G7 economy for declining living standards

UK worst G7 economy for declining living standards
Emma Lunn
Written By:
Emma Lunn

The Trades Union Congress (TUC) has slammed the Conservative government after analysis showed that the UK is the only country in G7 where household budgets have not recovered to pre-pandemic levels.

The union calculated that UK households would be £750 a year better off if real disposable income had grown in line with other leading economies.

The G7 is an intergovernmental political and economic forum consisting of Canada, France, Germany, Italy, Japan, the UK and the US.

The TUC said that real household disposable incomes in the UK were 1.2% lower in the second quarter of 2023 than at the end of 2019. But over the same period they grew by 3.5%, on average, across the G7. 

The union body warned that the contraction in UK household budgets is going to get worse – despite falling inflation. 

The Office for Budget Responsibility (OBR) forecasts that real house disposable income per head in Britain will fall by an additional 3.4% by the end of the first quarter of 2024. 

According to the same forecasts, household budgets won’t recover to their pre-pandemic levels until the end of 2026. 

The OBR said in November that UK households are suffering the worst period for living standards since modern records began in the 1950s.

The TUC claimed the Conservatives’ failure to grow the economy and deliver healthy wage growth has pushed many households further into debt. 

Analysis published by the union body at the end of December revealed that unsecured debt (credit cards, loans, hire purchase agreements) is set to rise by £1,400 per household, in real terms, this year. 

Working people ‘brutally exposed’

The TUC says working people have been left “brutally exposed” to rising costs after years of pay stagnation. 

The TUC estimates that the average worker has lost £14,800 since 2008 as a result of their pay not keeping up with pre-global financial crisis real wage trends. 

Paul Nowak, TUC general secretary, said: “The UK is the only G7 nation where living standards are worse than before the pandemic. 

“While families in other countries have seen their incomes recover – household budgets here continue to shrink. This is a damning indictment on the Conservatives’ economic record.  

“Their failure to deliver decent growth and living standards over the last 13 years has left millions exposed to skyrocketing bills – and is pushing many deeper into debt. We can’t go on like this. Britain cannot afford the Tories for a day longer.”