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Economics

U.K. Faces Biggest Income Squeeze Since the 1970s on Ukraine War

  • Think tank sees household incomes dropping by 1,000 pounds
  • Decline on a scale seen around past recessions, economists say
A protestor holds a sign during a 'current cost-of-living crisis' rally at George Square in Glasgow, U.K., on Feb. 12.

A protestor holds a sign during a 'current cost-of-living crisis' rally at George Square in Glasgow, U.K., on Feb. 12.

Photographer: Emily Macinnes/Bloomberg

U.K. households are facing the biggest fall in living standards for half a century as Russia’s invasion of Ukraine deepens the cost of living crisis, according to the Resolution Foundation.

Soaring oil and gas prices triggered by the war could see inflation exceed 8% this spring, the research group said in a report published Tuesday. That will cause typical incomes to drop by 4% in real terms, or around 1,000 pounds ($1,300), in the coming financial year.