Britain is getting poorer. Independent forecasts from the Office for Budget Responsibility published last week predicted a 7% drop in living standards over the next two years – an average of £1,700 per household, wiping out eight years of growth. Real wages will not return to the levels at which they were before the 2008 financial crisis until 2027.
The chancellor, Jeremy Hunt, described this as a “recession made in Russia” in his autumn statement last Thursday. Of course Britain is affected by the same recessionary drivers as the rest of the world: the Covid pandemic, followed by the impact of Russia’s invasion of Ukraine on global energy and food prices. But it is dishonest to pretend that Britain’s grim growth outlook is purely a product of global shocks. Other countries have proved more resilient, even as Britain’s economy is showing its fragility. The reason for that is 12 years of Conservative economic policy and political instability: what the Institute for Fiscal Studies has described as a series of “economic own goals”.