Workers face 'two lost decades without earnings growth'
Britain's national debt may not return to pre-financial crisis levels until "well past the 2060s", on the basis of projections released with Wednesday's Budget, a respected economic thinktank has warned.
And workers are facing two "lost decades" without earnings growth, the Institute for Fiscal Studies predicted in a bleak assessment of Chancellor Philip Hammond's Budget.
Despite a £25 billion giveaway, the Budget did not mark the end of the "age of austerity", said the IFS, pointing out that public services outside the NHS still face 7% cuts in day-to-day spending over the next five years.
"Grim" official forecasts from the Office for Budget Responsibility imply that GDP per head will be 3.5% lower in 2021 than was forecast less than two years ago, equating to a £65 billion hit to the economy, said IFS director Paul Johnson.
And average earnings in 2021 look set to be nearly £1,400 lower than forecast in March 2016 - lower in real terms than at the time of the financial crash in 2008.
"We are in danger of losing not just one but getting on for two decades of earnings growth," said Mr Johnson.