The Office for Budget Responsibility said it would be until at least mid-2013 before wages begin to rise faster than prices.
Disposable income for 2011 alone will drop, on average, by $2,411 for a middle class family, The Daily Telegraph reported Friday.
Along with the forecast, a separate report by the Institute for Fiscal Studies said the government commitment to National Health Services required $6.42 billion in cost savings or additional revenue or a combination of the two. Britain is also expected to raise nearly $10 billion in taxes to contribute to the European Union's bailout fund for struggling countries, the newspaper said.
Without these additional burdens, income tax for those earning $72,333 per year or more has risen this year, as has sales tax in Britain.
"I certainly accept that it is a tough time, absolutely. What I do see also in those forecasts is that unemployment will fall, employment will grow and growth will be there in each year," Chancellor of the Exchequer George Osborne said.
"That is a better future than, frankly, me having to wake up every morning as Britain's finance minister worrying about whether the country can afford to pay its way in the world," he said.
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