LIVING standards for many people are expected to fall as a result of Rishi Sunak’s budget, experts have said.

In an analysis of the Chancellor’s spending plans, the Institute for Fiscal Studies (IFS) has concluded that the budget created a “worrying outlook for living standards” and said many of the increases would be lessened or wiped out by the forecasted inflation rise next year.

Paul Johnson, director of the IFS, said that “millions will be worse off in the short term” and explained: “Next April benefits will rise by just over 3%, but inflation could easily be at 5%. That will be a real, if temporary, hit of hundreds of pounds a year for many benefit recipients.”

He said the budget was “almost entirely a set of policy choices unrelated to the pandemic” and said that the pre-Budget briefings “served only to obfuscate” and added: “Perhaps the Speaker was unduly concerned about the chancellor revealing too much of his Budget early. The truth is these briefings revealed less than nothing.”

The Chancellor insisted yesterday that it is his ambition to bring taxes down by the next election, but the IFS director warned of the challenges while trying to fulfil the demands of public services that have suffered a decade of cuts.

In opening remarks at a post-Budget event in central London, Mr Johnson said of the Chancellor: “If he is to achieve the ambition he set out at the end of his speech to get taxes down and reduce the size of the state, then he is going to have to come up with some pretty new and radical ways to manage those pressures.

“He would be helped by an economy growing rather more enthusiastically than it has managed for some time now.

“Finding the key either to reforming public services to make them cheaper and more efficient, or to getting higher economic growth, are challenges which have defeated most of his predecessors.”

Mr Johnson said if the current forecasts are correct then the Chancellor could be in line for a pre-election giveaway of “perhaps £7 billion and still maintain some fiscal headroom”.

“But, given his newly stated fiscal targets, it’s not a huge or comfortable cushion,” he added.