WORKERS face the longest period of stagnant pay since the Second World War while living standards are set to deteriorate to more severe levels than during the financial crisis, experts have warned.

The gloomy forecast has been included in analyses of the Chancellor’s Autumn Statement by two highly respected think-tanks, the Institute for Fiscal Studies (IFS) and the Resolution Foundation.

Director of the IFS Paul Johnson said that he could not stress enough “how extraordinary and dreadful” it would be for employees to endure more than a decade without a salary rise.

The UK had not experienced anything like it in the last 70 years, and perhaps even the last 100, he said.

He also claimed that Philip Hammond’s first mini-Budget on Wednesday had done little to help those “Just About Managing”, or Jams as they have been described by the Treasury. Instead, the Chancellor had pinned his hopes on “jam tomorrow” by borrowing to invest. These plans, however, were similar to Labour policies consistently attacked by the Conservatives over the past six years, Mr Johnson said.

In a nod to the previous chancellor and shadow chancellor, Mr Johnson said it was not far from the truth to conclude Mr Hammond’s “new fiscal plans aren’t Osborne’s, they’re Balls’”.

Overall, the IFS found the UK’s national income would be £30 billion lower than predicted, the equivalent of £1,000 per household.

In the wake of the Autumn Statement, the independent Office for Budget Responsibility (OBR) which provides independent analysis of the UK’s public finances, has forecast that the Brexit vote will blow a £59bn black hole in the country’s finances over the next few years.

By 2021, the UK would have to borrow an extra £122bn, the OBR calculates.

The IFS warned that the economic fallout would mean more than a decade of pay stagnation, with real wages remaining below their 2008 level until around 2021.

After Mr Hammond’s admission that he had given up hope of balancing the books by the end of this decade, the think-tank also predicted an “an additional dollop of austerity” running into the 2020s.

But the reality could be much worse than the predictions, Mr Johnson cautioned, as he stressed the OBR’s forecasts had been “noticeably more upbeat” than other experts, including the Bank of England.

Meanwhile, the Resolution Found-ation warned that living standards would face a worse squeeze than in the aftermath of the 2008 banking crisis.

This time, however, the hardest hit would be the low paid, because of the Conservative Government’s cuts to in-work benefits.

It said that over the last six years higher earners had, by a slight margin, been the worst affected.

In future, however, the burden would fall more on low and middle-income families and around one-third of people could actually see their incomes fall.

The foundation also warned ministers not to rely on the same “miracle” that had turned around the economy in recent years, saying that a rise in job numbers was unlikely to be repeated.

Torsten Bell, director of the Resolution Foundation, said: “The combination of lower growth, higher inflation and the government’s decision to press ahead with big welfare cuts, means that households risk experiencing even slower income growth in this parliament than they saw in the aftermath of the financial crisis . But Unlike the last parliament, it will be low and middle- income households who feel the tightest squeeze this time round.”

Meanwhile, the Fraser of Allander Institute at the University of Strathclyde predicted the Scottish Government’s day-to-day budget would fall by more than £900 million in real terms by 2019/20, similar to that predicted after George Osborne’s Budget in March.

Scottish ministers’ capital budget would grow by £800m, thanks to the Chancellor’s plans for investment in infrastructure, creating a “significant increase” in the amount that could be spent on new roads, hospitals and schools.

However, previous Tory cuts mean the level will still be lower in real terms than it was before 2010. Professor Graeme Roy, the director of the Fraser of Allander Institute, said: “With Scotland’s new tax powers coming into effect in April, the Scottish Government has an opportunity to reverse some of these cuts through higher tax rises. But it is also important that Scotland’s economy continues to grow as, under this new framework, failure to match UK growth will mean that this cut could turn out to be even greater.”

Pro-Brexit Tories have attacked the OBR, claiming its analysis of the economic outlook was too pessimistic.

Former Cabinet minister Iain Duncan Smith claimed that the forecasts were “another utter doom and gloom scenario” by an organisation “that simply hasn’t got anything right”.

Despite forecasts that the UK’s debt will rise to over 90 per cent of GDP next year, Mr Hammond denied that borrowing was “out of control”.

John McDonnell, the shadow chancellor, said that the “lost decade” was a “damning indictment of the total, abject failure of the Tories’ economic policy during their six wasted years in office”.

David Gauke , the Treasury chief secretary, said that the IFS’ use of average earnings did not “ give a full picture”.

“It doesn’t take into account the significant tax cuts the government has introduced to help working people keep more of what they earn,” he said.

First Minister Nicola Sturgeon said UK government had baulked at an opportunity to “end its failed austerity policy”.

She added: “The Tories don’t like to hear this because what we are hearing now is the reality of their recklessness on Brexit.”