‘British standard of living is virtually in free fall’

“The most striking thing is that the standard of living here is practically in free fall,” says UK correspondent Leah van Beekhoven. The standard of living is deteriorating, at a rate we haven’t seen since they measured things like this. This means a massive drop in disposable income, and inflation is the highest in decades, with all the consequences for purchasing power. That should scare you for a while.

low income people

Some subsidies to the British were included in the spring budget. “Lower and middle income earners were told they would pay lower income taxes and lower health insurance premiums,” says van Beekhoven. Moreover, there is good news for energy-neutral projects. Britons who want to install solar panels and water pumps will not have to pay VAT on those projects for the next five years.

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According to Van Beekhoven, the lowest incomes in particular are particularly hard hit by meager government support. They are again the big losers, for example, the people who have to fend for themselves to make ends meet. The benefits will increase by three percent, but in fact this means a decrease if you compare it with inflation, which, according to the government itself, will rise to seven percent this year.

Autumn budget

According to Van Beekhoven, the plans in the spring budget do little to prevent free-falling living standards. “It is very marginal. Middle incomes in particular benefit, a little higher and a little lower. Low income earners and those demanding benefits are not at all.

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The new procedures are effective immediately. “We will have another fall budget in the fall, and depending on how the situation develops economically, a number of these measures may be reversed,” van Beekhoven says. “This is in effect now, and will continue as long as it lasts.”