FAMILIES face being £1,200 worse off next year as fears grow of a deep recession.
The warning comes from a spending watchdog which warns people will feel poorer for years.
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It says tax cuts and slashing spending are needed to curb the national debt, which could treble in 50 years.
Many families face losing four per cent of disposable income next year — about £1,200 for the average household, the Office for Budgetary Responsibility says.
And if energy prices continue to soar the economy may shrink by two per cent, the same hit as during the coronavirus pandemic.
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The OBR said ministers have already spent 1.5 per cent of Britain’s GDP on measures to curb the cost of living crisis.
Experts say with Whitehall debt set to run at more than 100 per cent of GDP by 2050, the government “would need taxes to rise, spending to fall, or a combination of both”.
That would mean cuts of £37billion a year.
The OBR said the Ukraine war, soaring energy prices and pressure on the nation’s finances “add up to a challenging outlook for this and future governments”.
The watchdog added: “Many threats remain, with rising inflation potentially tipping the economy into recession, continued uncertainty about our future trading relationship with the EU, a resurgence in Covid cases, a changing global climate and rising interest rates all continuing to hang over the fiscal outlook.”
Treasury minister Simon Clarke said: “The government is ensuring it continues to support people and the economy in the face of global pressures and uncertainty while reducing debt.”
But Labour’s Shadow Chancellor Rachel Reeves insisted: “We need a serious plan for growth and a stronger, more secure economy.
