Living standards are still forecast to rise following the Budget—but it’s a smaller rise than was expected before

“What the government’s own independent watchdog the OBR said yesterday is, as a result of these changes… we are going to have lower living standards, we are going to have higher prices, fewer jobs, more expensive mortgages, life is going to get tougher for ordinary people.”

In an interview on BBC Breakfast the day after Labour’s first Budget in 14 years, outgoing shadow chancellor Jeremy Hunt MP claimed that the measures set out by Labour were going to result in “lower living standards”.

We’ve asked Mr Hunt what he meant by this, and haven’t yet had a response—we’ll update this fact check if we hear back. But it seems he was suggesting that things would get worse over time, because he also said “life is going to get tougher for ordinary people”. 

If so, this isn’t what the Office for Budget Responsibility (OBR) forecasts that he mentioned suggest.

When looking at Real Household Disposable Income (RHDI)—a common measure of living standards—the OBR said that it is expected to increase over the next five years, albeit by less than previously forecast.

In its report, the OBR says: “Compared to our March forecast, the level of RHDI per person is just over 2 per cent higher at the start of the forecast due to data revisions, but 1¼ per cent lower by the start of 2029. The bulk of this difference (around 85 per cent) is explained by policies announced in this Budget.”

In short, it’s true that the Budget is expected to cause households to be worse off in a few years’ time than they would otherwise have been. But it is not true that households are actually expected to become worse off in future than they are now.