UK Living Standards Set to Decline Further as Inflation and Weak Growth Persist

By Staff, Agencies

Living standards in the UK are expected to continue deteriorating as high inflation and sluggish economic growth weigh on the country’s performance, according to a new report by the Centre for Economics and Business Research [CEBR].

In its annual World Economic League Table, released on Friday, CEBR forecasts that the UK will slide from 19th to 22nd place in global GDP per capita rankings by 2030, overtaken by economies including Hong Kong, Finland eand the United Arab Emirates. The report also projects that by 2035, British living standards will fall below those of Malta, a former UK colony.

The study estimates UK GDP per capita at $58,775 next year and predicts that Britain will record the second-weakest GDP per capita growth rate in the G7 over the next five years, ahead of only Japan.

CEBR economist Pushpin Singh described the UK as facing a “triple challenge” of elevated inflation, heavy public debt, and weak growth. He warned that the country’s competitiveness is being undermined by rivals offering lower taxes and lighter regulatory regimes, while government spending remains difficult to rein in.

The report noted that 2025 marked the Labor government’s first full year in power. While it was elected on promises to stimulate growth, CEBR said progress has been limited, estimating economic expansion of just 1.4% in 2025 and projecting average annual growth of around 1.5% in the coming years.

Singh cautioned that the economic outlook remains “skewed to the downside,” adding that the UK is, in some respects, still relying on past strengths. He also said uncertainty over possible tax increases ahead of the budget has dampened economic activity in recent months.

Official figures cited in the report show that British households remain worse off than before the COVID-19 pandemic, with real disposable income per person still below 2019 levels amid an ongoing cost-of-living crisis.