Outlook bleak

The number of people living in poverty in the UK is set to rise, according to a report from the Institute of Fiscal Studies (IFS) and the Joseph Rowntree Foundation (JRF) According to this research, both relative and absolute poverty amongst children and working age adults are expected to increase as earnings growth is forecast to remain weak and inflation high. The other factor this report considers is the effect of current government policy, looking at the mix of the new Universal Tax Credit and changes to benefits such as Local Housing Allowance, which from April 2013 will be indexed in line with consumer price index rather than the retail price index. IFS argues that this combination of reforms is likely to increase poverty: both IFS and JRF have frequently stressed that the Child Poverty Act targets are challenging and this report offers no encouraging vision of the future.