War in Middle East threatens UK living standards growth, as markets brace for energy shock – business live

02.12 EST Introduction: War in Middle East threatens UK living standards growth Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. The dust is settling after Rachel Reeves’s spring forecast statement yesterday, which showed that growth will be weaker than hoped this year while unemployment will be higher. While the chancellor claimed the UK could ‘beat the forecasts again’, economists are concerned that the ongoing Middle East crisis will hurt the economy, and household finances, badly. The Resolution Foundation have just released their overnight analysis of the Office for Budget Responsibility’s forecast. The good news? The UK is set for a “decent”, one-off increase in living standards this year, and a bumper rise for lower-income families. The bad news? A fresh energy price shock risks wiping out these gains. The big picture? The medium-term picture for living standards remains bleak According to Resolution’s calculations, living standards for typical working-age families are set to grow, by £300, over the coming year (between 2025-26 and 2026-27). Lower-income households are set for a bigger bump in living standards, up 3.9% or £800. This would be the second strongest year for living standards in the past two decades for poorer families. BUT if energy prices don’t drop, then all these gains will be wiped out. If recent rises in the price of oil and gas were to be sustained they could add around a percentage point to inflation and £500 on to typical annual energy bills, Resolution say. Ruth Curtice , chief executive at the Resolution Foundation , says: “The immediate economic outlook for Britain is highly uncertain, with yesterday’s forecasts already looking out of date, while the living standards picture for the rest of the Parliament is very lopsided. “This coming year is set to be a decent one for living standards, and a bumper one for poorer families, as wages and benefit support rise above the level of ...