Shrinking real incomes could prove a new year nightmare for Rishi Sunak

As GDP and wage growth stall, inflation is still climbing sharply, writes Anna Isaac

From the poorest to the middle classes, households are set to be squeezed in 2022, piling pressure on the chancellor (Reuters)

There’s little cheer for the chancellor, Rishi Sunak, as he looks to spin a positive narrative about the UK economy in the year ahead.

Wage growth is expected to stay below inflation throughout 2022, according to a forecast from the Resolution Foundation, an economic think tank that examines living standards. In its words: “The medium-term outlook for wages is uncertain but far from rosy.”

The upshot: families can expect an extremely painful £1,200 hit from next April on average, as taxes and energy prices rise.