The Office for Budget Responsibility’s economic and fiscal outlook document published alongside the chancellor’s Spring Statement yesterday has warned of biggest drop to living standards since the 1950s.

The document claims that inflation is set to outstrip any increase in earnings, leading to the largest fall in income since the 1950s.

“Rising inflation outpaces nominal earnings growth which, combined with net tax increases starting in April, weigh heavily on living standards in the coming 12 months. Real household disposable incomes per person fall by 2.2 per cent in 2022-23, the largest fall in a single financial year since ONS records began in 1956-57.”

It also warns that tax rises will reach their highest level since the aftermath of the second world war:

“Those net tax rises, plus the more tax-rich composition of economic activity that has been factored into this forecast, raise the tax burden from the 33.0 per cent of GDP recorded in 2019-20 to 36.3 per cent of GDP in 2026-27 – its highest level since the late 1940s.”