BRITISH workers will need pay rises of 8 percent on average this year to offset the living standards squeeze from higher energy bills, tax rises and broader inflation if the government does nothing to help.

Analysis by the Tony Blair Institute for Global Change shows that the poorest fifth of U.K. workers will need a wage increase of more than 10 percent to compensate them for the hit to incomes. The work looked at the combined impact of the April hike in energy bills and taxes, alongside general inflationary pressures.

The figures, which are adjusted to account for an improvement in the in-work benefit taper, underscore the full scale of the living standards crisis facing working households this year. Even better-off workers will need pay rises of more than 7 percent to maintain the same level of household income. The latest official figures show earnings rising at just 3.5 percent.

“Come April, inflation, energy bills and tax rises will squeeze low-income households much harder than the better off,” said Ian Mulheirn, chief economist at the Institute for Global Change. “There’s a lot of pain to go around, and it’s hard to see any way the government can avoid shouldering a chunk of it.”

(SD-Agencies)