Younger people saw the sharpest decline in their incomes during Britain's 2008-2009 recession,the Institute for Fiscal Studies (IFS) said in a report,highlighting the risk the young face of experiencing lower living standards than their parents. Inflation in Britain hit a three-year high of 5.2 per cent in September,adding to a severe squeeze in living standards as the country struggles to recover after its deepest recession since the 1930s. Until either wages start increasing or inflation falls,prospects for living standards increasing again are limited said economist Cormac O'Dea,who co-authored the think tank's report issued on Wednesday. The average income for young households fell 6 per cent in each year of the 2008-2009 downturn,compared with a yearly fall of 0.4 per cent for the middle aged and a rise of 2.2 per cent for older people,O'Dea said. Older people increased their expenditure by 3.3 per cent a year,while young people cut back 6 per cent and the middle aged reduced spending by 2.6 per cent. Young people are more likely to lose their jobs and are typically worst hit by recessions,but this trend was more pronounced than in previous downturns,O'Dea said. Unemployment is rising again in Britain and the jobless rate among young people is now one of the highest in Europe. 'Young households' were measured as those where the eldest member was aged under 35; middle aged as those aged 35-65,with the old defined as those above retirement age. The recession was uniquely marked by people cutting back on food spending,which O'Dea said could indicate that consumers saw it as something more permanent than previous downturns.
