Responding to Chancellor Rishi Sunak’s Spending Review announcement on Wednesday this week, the think tank has warned that the coronavirus crisis is prolonging the UK’s 15-year decline in living standards and ‘leaves austerity in place for many public services’.

The foundation’s latest report, Here today, Gone Tomorrow, claims that by 2025, the average pay in the UK will be £1,200 lower than forecast before the outbreak of the pandemic.

The Resolution Foundation also warns that six million households across the country will lose £1,000 in reduced Universal Credit next April, at the same time that unemployment rates are expected to peak.

The report also found that household incomes are on course to grow by just 10% in the 15 years since the start of the financial crisis in 2008, compared to the 40% growth seen in the 15 years running up to the crisis.

Torsten Bell, chief executive of the Resolution Foundation, said that the COVID crisis is causing ‘immense damage’ to both public and family finances.

She said: “The pandemic is just the latest of three ‘once in a lifetime’ economic shocks the UK experienced in a little over a decade, following the financial crisis and Brexit. The result is an unprecedented 15-year living standards squeeze.

“The Chancellor chose to ramp up his COVID spending to £335 billion. But he also quietly dialled down his spending plans beyond the crisis. For all the talk of ending austerity, its legacy will continue for many public services throughout the parliament.

“While the priority now is to support the economy, the permanent damage to the public finances mean taxes will rise in future. But which taxes those will be, like which Brexit we can expect, are questions the Chancellor left for another day.”