Rising energy prices linked to the US/Israel-Iran war are expected to reduce UK household living standards, according to new analysis by the Resolution Foundation.
The think tank estimates the median working-age household will be around £480 worse off over the financial year, with incomes projected to fall 0.6% rather than rise. James Smith, Chief Economist at the Resolution Foundation, said financial pressures are “already done” despite a recent ceasefire.
Lower-income households may see limited gains from benefit increases, but inflation is expected to offset much of this, while middle- and higher-income groups face declining real incomes.
• Median household income projected to fall 0.6% in 2026
• Around £480 annual loss linked to energy market pressures
• Hiring slowdown continues, with permanent placements below growth threshold
• NHS trusts in England planning at least 21,000 job cuts
Chancellor Rachel Reeves has ruled out broad subsidies, signalling targeted support for vulnerable households and upcoming measures for businesses.
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