Biggest hit to living standards on record as Hunt lays out autumn statement

Underlining the fragility of the economy, the chancellor pushed back the fresh austerity measures until after the next election amid evidence that higher energy bills and the worst inflation in four decades will cause a protracted recession, a jump in unemployment of 500,000 and a lost decade for living standards.

The OBR said the economy had just entered a recession that would last for more than a year and lead to the economy shrinking by 1.4% in 2023.

Labour said taxes on families were set to rise by £120bn since before Rishi was chancellor, equivalent to more than £4,000 per family.

There was a muted response to the autumn statement from Tory MPs, who sat in funereal silence as the chancellor announced a string of tax rises that will leave the UK with the largest tax burden since the second world war.

Tory strategists hope Hunt will have done enough to stabilise the economy and, if the international picture improves, that Britain could start to emerge from recession before the next election. They are banking on households being in a better place financially and so less likely to punish the Tories electorally.

However, by pushing back £30bn of spending cuts until after the election, the chancellor has guaranteed that the state of public services will be a key battleground in the run-up to the next election.