Millions face tax rises amid worst drop in living standards on record

Jeremy Hunt painted a gloomy picture of recession and falling living standards as he announced a £55 billion combination of tax rises and spending cuts to stabilise the public finances.

The government’s independent forecaster, the Office for Budget Responsibility, says that disposable household incomes will fall by 7% over the next two years, the biggest drop in living standards on record.

Most of the spending cuts are delayed for two years until after the next general election.