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Household squeeze on the way

Money Advice Trust comments on Autumn Statement 2016 and OBR forecasts.

Joanna Elson OBE, chief executive of the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said of today’s Autumn Statement and OBR Economic and Fiscal Outlook:

“Today’s forecasts confirm that we are entering a period of higher inflation and lower wage growth – and that means another unwelcome squeeze on household incomes is on the way.

“Many households have never really recovered from the last prolonged squeeze on incomes in the aftermath of the financial crisis.  Our concern is that this new pressure on household budgets will tip many more people into financial difficulty. 

“As ever, the Autumn Statement was a mixed bag of announcements.  The Chancellor made welcome interventions on letting agent fees, an increase in the national minimum wage for over 25s, and a small change in the taper rate for Universal Credit. 

“However, these positive measures are far outweighed by the continuation of the benefits freeze, and previously announced cuts to Universal Credit.  Ultimately, the impact of these cuts on low income households will be more keenly felt in the less benign economic environment the UK is now entering.

“Amidst this shift in economic conditions, we need to prepare for what could be a significant increase in debt problems in the year ahead.”

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