𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

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Responding to the Budget on Wednesday, Opposition leader Kemi Badenoch claimed the Office for Budget Responsibility (OBR) has forecast “real household disposable income: lower every year”.

Robert Jenrick, Reform UK’s Treasury spokesman, made a similar claim on GB News on Thursday. Speaking of the Chancellor, Mr Jenrick said: “By his own figures he’s saying that living standards for people in this country will decline every single year for the next five years.”

Evaluation

The OBR’s forecast sees real household disposable income (RHDI) – which is likely the measure both politicians are referring to – fall this year, but rise in each subsequent year until 2031.

Compared with its previous forecast in March, RHDI annual growth has been downgraded in some years by the OBR and upgraded in others. However, thanks to the fall in 2026, RHDI is lower in each year of the forecast than the OBR had previously estimated. It appears this is what Mrs Badenoch was referring to.

It is unclear what Mr Jenrick was referring to as there does not appear to be any measure in the OBR forecast by which living standards decline every single year.

The facts

The OBR calls real household disposable income “a useful though incomplete measure of living standards”.

According to the OBR’s report, RHDI is forecast to fall this year, but then rise in each of the following years in the forecast. It falls by 0.6% in 2026, then rises by 0.2% in 2027, 0.9% in 2028, 0.7% in 2029, 1.1% in 2030, and 1.0% in 2031.

Compared with its March 2026 forecast, RHDI annual growth was downgraded by 1.3 percentage points this year and 0.5 points in 2027. It was upgraded by 0.2 percentage points in 2028 and 2030, while there was no change to the 2029 forecast. There was no previous forecast for 2031.

Chart 2.6 in the OBR report shows that compared with March’s forecast, RHDI in this forecast is lower each fiscal year than what was previously expected. This is because of the falls early on in the forecast. This is what the Conservative Party pointed to when asked to clarify Mrs Badenoch’s comment.

RHDI falls in 2026, but rises each of the next five years – growing by £766 to 2031. However, compared with the March forecast, RHDI will be £356 lower in 2026 than previously thought, and £250 lower in 2030. These figures are all in constant 2023 prices.

What other forecasts could measure living standards?

The OBR calls real GDP per person “an indicator of average living standards”. However, this increases in every year of the forecast. The lowest rise over the period is 0.9% in 2027, while the highest is 1.6% in 2029.

Average real earnings – both weekly and hourly – could also be seen as a way of measuring how well off people in employment are. However, these also rise in every year of the OBR’s forecast, apart from a dip in 2027.

Reform UK has been contacted to clarify Mr Jenrick’s comments.

Links

Hansard – Wednesday 28 October 2026

OBR – Economic and fiscal outlook – October 2026 (archived)

OBR October 2026 Economic and fiscal outlook – detailed forecast tables: economy (archived spreadsheet with analysis)

October 2026 Economic and fiscal outlook – charts and tables: Annex A (archived spreadsheet with analysis)