United Kingdom workers facing no growth in earnings for the next 20 years

Theresa May and Philip Hammond

Director Mr Johnson added: "That assumes no recessions for the next half century".

Paul Johnson, the IFS's director, said the "pretty grim" outlook suggests average earnings are set to be almost £1,400 less in 2021 than forecast in March 2016 and lower in real terms than before the 2008 financial crisis.

In a bleak analysis of Chancellor Philip Hammond's Budget, it found the age of austerity was not over "by a long chalk" and warned it may be 50 years or more before the United Kingdom gets its national debt back down to pre-crisis levels.

The IFS also predicted that the UK's national debt might not return to pre-financial crisis levels until "well past" the 2060s, that public services outside the National Health System faced seven percent cuts in day-to-day spending over the next five years, and that the government forecast of a 3.5 percent GDP per head drop in 2021 would hit the economy excessively hard.

The head of an influential economic research institute said Thursday that he'll be dead before United Kingdom debt falls back below pre-financial crash levels.

However, on a visit to Leeds, the Prime Minister offered praise for Mr Hammond, stating that he had done "a very good job". What's remarkable is it looks like we have at least another five years to go before we get anywhere near to having earnings back to where they were in 2008.

Theresa May and Philip Hammond
GETTY PRAISE Mr Hammond’s Budget was praised by Mrs May

He also said the Chancellor's £25bn cash injection to offset some of the damage would peak at £9bn in 2019-20 but "dissipate very quickly thereafter, magically becoming a takeaway by 2022-23".

Director Paul Johnson said the figures indicate another year of "spending restraint", telling reporters: "This is not the end of austerity, not by a long chalk". 'There are still almost £12billion of welfare cuts to work through the system, while day-to-day public service spending is still due to be 3.6 per cent lower in 2022/23 than it is today'.

The think tank added that as a result of tax and benefit policies announced since the 2015 Budget, the poorest third of households are set for an average loss of £715 a year by the end of this Parliament.

The OBR's decision to downgrade projected annual productivity growth from 1.7% to 1% was "as likely to be too optimistic as to be too pessimistic", he said.

A Government spokesman said: "The Budget set out the next steps in our plan to build an economy that is fit for the future, deliver the homes our country needs and support families and businesses".

"Excluding health, the cut for the rest of public services is over 6%". Some buyers with smaller deposits may be able to borrow more, "allowing them to buy properties that they otherwise could not afford - but more expensively", the OBR says.

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