A report released on Tuesday forecasts that UK living standards will be cut by £2,500 ($3,285) per household this year, as inflationary pressure and a slower economy hit after the West imposed a raft of economic sanctions against Russia.
The Centre for Economics and Business Research (CEBR) claims that living standards in Britain are set to take their biggest hit since records began 1955, as global commodity prices and inflation rise in response to the sanctions.
The CEBR has halved its growth forecast for the UK in 2022 from 4.2% to 1.9% and predicts a more dire situation in 2023, with its growth estimate being reduced from 2% to 0%, seeing the economy grind to a standstill.
The situation will “likely” put UK Chancellor Rishi Sunak “under further pressure to put the economy on a semi wartime setting” when he delivers his spring statement on March 23, the CEBR said. However, the group did not outline exactly what steps the chancellor should take to protect the UK economy.
Sunak has not yet said he will deliver a budget speech, indicating the government is not set to go down the route suggested by the CEBR.
The CEBR indicated that the situation could get worse for the UK, noting that this assessment is “not meant to be even a worst case set of assumptions” and the threat of an oil embargo by Russia has not been addressed within the group’s report.