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British families eye financial decline under Tory austerity

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And to think the tough talk sounded so rugged and convincing to some at the beginning. With an economy swirling down the toilet bowl and a future that looks bleak, it's a wonder anyone still supports the Tories. Brace yourself America, because this is what the Republicans are eager to do. They've already started in some states but a nationwide program would be a death blow to struggling families.

High inflation, cuts and the longest period of wage stagnation on record will see the spending power of the average British family plummet over the next five years, a leading thinktank warned on Wednesday.

An Institute for Fiscal Studies analysis predicted that average incomes, adjusted for inflation, will fall by 3% this year and further in 2012. The director of the IFS, Paul Johnson, said: "In the period 2009-10 to 2012-13, real median household incomes will drop by a whopping 7.4% – a record matched only by the falls seen between 1974 and 1977."

As up to 2 million public sector workers walked out in protest against changes to their pensions, and signs emerged of a potentially damaging rift within the Liberal Democrats in the wake of George Osborne's autumn statement, the thinktank warned that families with children will be worse off in 2016 than they were 14 years earlier as they cope with more than a decade of austerity.

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