BRITAIN'S national debt may not return to pre-financial crisis levels until "well past the 2060s", on the basis of projections released with Wednesday's Budget, a respected economic thinktank has warned.

And workers are facing two "lost decades" without earnings growth, the Institute for Fiscal Studies predicted in a bleak assessment of Chancellor Philip Hammond's Budget.

Despite a £25 billion giveaway, the Budget did not mark the end of the "age of austerity", said the IFS, pointing out that public services outside the NHS still face 7% cuts in day-to-day spending over the next five years.

"Grim" official forecasts from the Office for Budget Responsibility imply that GDP per head will be 3.5% lower in 2021 than was forecast less than two years ago, equating to a £65 billion hit to the economy, said IFS director Paul Johnson.

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And average earnings in 2021 look set to be nearly £1,400 lower than forecast in March 2016 - lower in real terms than at the time of the financial crash in 2008.

"We are in danger of losing not just one but getting on for two decades of earnings growth," said Mr Johnson.

Meanwhile Living standards could face their biggest squeeze since records began in the 1950s and productivity growth is set to be the worst since the early 1800s, the Resolution Foundation said.

Analysis by the living standards think tank also indicated that Chancellor Philip Hammond's flagship stamp duty cut will cost the equivalent of £160,000 per extra home bought - suggesting the Government could have simply bought people a new property in many areas of England and Wales. The "truly catastrophic" cuts to the Office for Budget Responsibility's forecasts for growth suggest the economy will be £42 billion smaller in 2022 than had been expected in March, the analysis showed.

On a 10-year rolling basis, productivity growth is set to fall to 0.1% cent by the end of 2017, marking this as the worst decade for productivity growth since the 10 years to 1812.

The future for family finances is "unremittingly grim" with pay forecast to be £1,000 a year lower on average than the OBR thought in March.

The Resolution Foundation expects that pay rates will not reach the levels seen before the 2008 financial crash until 2025.

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The "living standards disaster" will see disposable income £540 lower than previously expected by 2022 "with the current fall in real incomes set to continue and to become the longest on record".

The abolition of stamp duty for the first £300,000 of properties bought by first-time buyers is only forecast by the OBR to result in 3,500 additional sales - despite costing nearly £600 million a year.

"That equates to a unit cost of £160,000 per additional owner - sufficient to have actually bought them a typical property outright in 26% of local authorities in England and Wales," the Resolution Foundation report said.

The Chancellor has said the OBR's figures were based on a "narrow" analysis of the policy change and did not take into account Government measures to boost the supply of new homes.

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 £3 billion 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."