New Year’s Outlook 2023 - They think it’s all over… it isn’t now
23 December 2022
Figure 1 Low-income working families are cutting a lot over the festive period Proportion of families that have tried to cut spending back a lot or a little on presents, food or treats over the festive period, by income quintile if employed, and by those not employed: UK, 23-30 November Notes: Base is all those who've cut back a lot on over the festive period and in each of the categories listed. [...] Data are adjusted to account for seasonal patterns by removing the average deviation each calendar month from the average rate over the course of the year between 2021 and 2022. [...] April’s energy price rise will drive a pick-up in inflation, extending the period of falling real wages into the second half of 2023 on the basis of the OBR’s forecasts. [...] Although the damage to our pay packets will start to be undone in the second half of the year, the scale of that damage means real earnings won’t return to today’s levels until well into 2024 (Figure 7) and aren’t forecast to return to 2008 wage levels until 2027. [...] The OBR and Bank of England respectively expect 340,000 and 440,000 more people to be out of work by the end of 2023.