Capital Economics has predicted that the worst year of the looming fiscal squeeze will be 2011, when most consumers will feel financially worse off as a result of changes to the tax and spending regimes.
Economists there have calculated that 2.5pc could be knocked off household income growth during 2011, compared with a 0.5pc fall in 2010 and a further 1.5pc reduction in 2012.
“The worst year of the fiscal squeeze looks likely to be 2011. [It] will primarily consist of spending cuts, involving public sector job losses and pay freezes. But taxes will need to rise too, by perhaps £20bn per annum,” said Vicky Redwood of Capital Economics.
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Brunt of Britain's pain to be felt in 2011, economists say
Capital Economics has predicted that the worst year of the looming fiscal squeeze will be 2011, when most consumers will feel financially worse off as a result of changes to the tax and spending regimes.
Economists there have calculated that 2.5pc could be knocked off household income growth during 2011, compared with a 0.5pc fall in 2010 and a further 1.5pc reduction in 2012.
“The worst year of the fiscal squeeze looks likely to be 2011. [It] will primarily consist of spending cuts, involving public sector job losses and pay freezes. But taxes will need to rise too, by perhaps £20bn per annum,” said Vicky Redwood of Capital Economics.
Read it all.