Alarm bells have been sounded over living standards, with one think tank warning that Britain is on course for the longest period of decline since records began.
In its analysis of yesterday's Budget, in which the Office for Budget Responsibility made its biggest downgrade since being created in 2010, the Resolution Foundation claims we are facing an "unprecedented" challenge to our public and household finances.
The report, called Freshly Squeezed, pulls no punches: its opening sentence says the OBR gave Hammond "a truly catastrophic set of economic forecasts".
It goes on to highlight some of the OBR's most stark downgrades - including that this decade could become the worst for productivity growth since the 1810s, and that the economy is expected to be £42bn smaller in 2022 than was forecast in March this year. This means the current squeeze on household incomes will be "longer, though shallower" than it was after the 2008 crash, with disposable incomes set to fall for 18 successive quarters between 2015 and 2022.
The future for public finances is not too disastrous, the report notes, but when it comes to family finances it looks "unremittingly grim". It estimates that average pay will not have recovered until 2025 - 17 years after the squeeze first began.
Measures announced since 2015 do nothing to improve the situation for the very poorest, the foundation argues. It claims that the poorest third of households are set for an average loss of £715 a year by the end of the parliament, while the richest third gain an average of £185.
The think tank said Philip Hammond's Budget revealed the chancellor had "chosen to accept that public finance deterioration and increase it by a further £15bn".
"In doing so, he has all but abandoned his main fiscal objective, and manifesto aim, of reaching an absolute surplus by the middle of the decade," the report adds.
While the think tank said Hammond's focus on housing was "welcome", it slammed him for not tackling the supply side issue.
Of his stamp duty measures, it warned that the policy would cost £600m a year - equivalent to £165,000 for every additional home owner created. That would have been "sufficient for the chancellor to have instead simply given people typically priced properties in over a quarter of local authorities in England and Wales".
Torsten Bell, director of the Resolution Foundation, said: “Following years of incremental changes, yesterday the OBR handed down the mother of all economic downgrades pushing up borrowing for the Treasury.
“While Philip Hammond chose to take a relaxed approach to additional borrowing, families are unlikely to do so when it comes to the deeply troubling outlook for their living standards that the Budget numbers set out. Families are now projected to be in the early stages of the longest period of continuous falls in disposable incomes in over 60 years – longer even than that following the financial crisis.
“On the substance of the Budget the chancellor has made the right call in boosting housing investment and focusing on this key issue of intergenerational concern. However, yesterday’s stamp duty rabbit is in reality a very poor way to boost home ownership. Its £3bn cost could have been better spent building 140,000 new homes through the government’s own Housing Investment Fund.
“Faced with a grim economic backdrop the chancellor will see this Budget as a political success. But that would be cold comfort for Britain’s families given the bleak outlook it paints for their living standards.
“Hopefully the OBR’s forecasts will prove to be wrong because, while the first sentence of the Budget document reads ‘the United Kingdom has a bright future’, the brutal truth is: not on these forecasts it doesn’t.”