By Marcus Leach
A report published by the Institute for Fiscal Studies (IFS) has warned that UK household budgets will be squeezed over the coming ten years.
Families will see their budget reduced as the full impact of tax rises and cuts come into force.
The survey suggests that families have seen the biggest fall in living standards in 30 years in the last financial year. And the bad news doesn't stop there, with a warning that the poorest families are set to see further cuts in their spending.
"The current economic downturn began more than three years ago, and may seem like old news," Robert Joyce, a research economist at IFS and a contributor to the report, said.
"But, as in other developed countries, the most severe consequences of the recession on UK living standards have only just begun to be felt, and will continue to be felt for years to come."
Whilst the Treasury's plans to cut the deficit have maintained low interest rates and helped struggling families, earnings, state benefits and tax credits had all fallen in real terms in the UK over the past year.
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