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UK facing period of falling wages and lower living standards, Institute of Fiscal Studies warns

The UK is facing austerity measures until the end of this decade amid falling wages and lower living standards, the Institute of Fiscal Studies has warned.

IFS Director Paul Johnson said the Chancellor has 'very little room for manoeuvre' because of the weakened growth forecast for the economy from the Office for Budget Responsibility.

It comes after the Chancellor delivered his Budget to the House of Commons on Wednesday.

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Tax-free personal allowance raised to £11,500

The tax-free personal allowance is being raised to £11,500 with the Chancellor declaring 31 million people will be paying less tax and 1.3m of the lowest paid taken out of tax altogether.

Mr Osborne also announced the higher rate threshold will rise from £42,385 to £45,000 from April next year, taking more than half a million people "who should never have been paying the higher rate out of that higher tax band altogether".

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