Labour faces overseeing worst Parliament for living standards in modern times with think-tank warning families could be up to £770 worse off by 2029

Published: 06:04 EDT, 8 October 2026 | Updated: 06:14 EDT, 8 October 2026 Andy Burnham could face calling a general election at the end of the worst Parliament for living standards in modern times, according to a grim report.Analysis by the Joseph Rowntree Foundation estimated that family incomes are on track to be between £440 and £770 lower in real terms in 2029-30 than when Keir Starmer was elected two years ago. That would easily outstrip the only previous fall in records going back to the 1960s, the two-year Parliament from 2015-17.It would leave the PM - who has insisted he will not call an early election - making his case to voters against a dire backdrop. The dismal picture emerged less than three weeks before Chancellor John Healey is due to deliver his first Budget.Soaring debt costs and inflation from the Middle East chaos are thought to have hammered the public finances outlook, potentially forcing Mr Healey to look at tax hikes or spending cuts. Analysis by the Joseph Rowntree Foundation estimated that incomes are on track to be between £440 and £770 lower in real terms in 2029-30 than when Keir Starmer was elected two years ago The dismal picture emerged less than three weeks before Chancellor John Healey (pictured with Andy Burnham) is due to deliver his first BudgetThe JRF looked at two scenarios previously used by the Bank of England, one with 'central' outcomes and an 'adverse' variation where global factors go against the UK.The anti-poverty charity found higher energy and housing costs and weak earnings growth took a toll on living standards in both scenarios.It projected that real incomes will be £180 worse in 2027-28 than this year, with the shortfall deepening to £440 if the circumstances are 'adverse'.The poorest 20 per cent will be worst hit because energy and housing essentials make up more of their outgoings, according to the report.In contrast, if incomes grew at the typical rate from 1962 to 2020 they would be up £5,000 over the Parliament. The JRF urged Mr Healey to respond to the crisis by subsidising an 'essential' level of energy supplies for families.It also proposed rent controls, an increase in benefits and more employment rights.The report suggested that could be funded by equalising capital gains tax rates with income tax and closing loopholes - although critics argue that might actually end up reducing revenues for the Treasury. The report warned that real incomes could be £180 worse in 2027-28 than this year, with the shortfall deepening to £440 if the circumstances are 'adverse' The JRF contrasted the income projections with the typical rate of growth from 1962 to 2020It also called for tax rates on rents, savings and dividends to be brought into line with the 'effective tax rate on work'. Chris Belfield, Chief Economist at the Joseph Rowntree Foundation, said: 'Without bold policy action on living standards, families are set to be poorer than they were a decade ago. 'This is terrible both for families who are just treading water to get by and the more than seven million families who are already routinely going without essentials like food and basic toiletries.'