Brits have "just got a lot poorer" and those on middle incomes are "set for a shock" Chancellor Jeremy Hunt has been warned after his brutal Autumn Statement.
In a bleak verdict, the respected Institute for Fiscal Studies said a series of economic "own goals" had worsened the UK's "long, hard, unpleasant journey".
As the recession takes hold, economists said a historic fall in living standards will "hit everyone" and higher taxes could last several decades.
"The truth is we just got a lot poorer," the IFS director Paul Johnson said.
In an article for The Mirror the Labour leader Keir Starmer also accused Rishi Sunak of picking the pockets of working people and "clobbering" their pay.
"After 12 years of Tory government, we face the highest tax burden since the Second World War, soaring bills, and the biggest hit to living standards on record."
With household disposable income set to crash by 7% by 2023, the IFS said those on "middling sorts of incomes will feel the biggest hit".
"They won't benefit from the targeted support of those on means-tested benefits. Their wages are falling and their taxes are rising. Middle England is set for a shock".
According to the IFS around 4% of adults - or 2 million people - will be paying income tax at 60% or 45% by 2027-28 while 8 million are expected to pay the 40% rate.
The Resolution Foundation think-tank also warned that workers' wages could be an eye-watering £15,000 lower by 2027 after two decades of wage stagnation.
They claimed the typical household faces a 3.7% permanent income hit after Mr Hunt set out plans for £55billion of tax hikes and spending cuts on Thursday.
Senior researcher James Smith said: “As an energy importer during an energy price shock, Britain is getting poorer. Deciding how we do so was, to a significant extent, the choice facing the Chancellor.
"He has decided that households will do so with higher energy bills, higher taxes, and worse public services than previously expected. Whether or not making the choices was tough, the reality of living through the next few years will be.”
Just 24 hours after the Chancellor delivered the Autumn Statement there were also signs of a Tory rebellion brewing.
Ex-Cabinet minister Esther McVey suggested the tax rises could be the "final nail" in the party's electoral chances.
"I can't be supporting these rises, I said look at other places that you could have saved the money and got more value for the British people," she told GBNews.
Former Business Secretary Jacob Rees-Mogg also criticised the Chancellor's approach, saying putting up taxes was the "easy option".
"What we actually need to be doing is having a strategy for growth and looking to lower taxes," he said.
The backbench Tory MP Sir Charles Walker told Times Radio he didn't "particularly like" the contents of the Autumn Statement, but said it was "necessary" to get public finances "back into shape".
But Mr Hunt denied yesterday [FRI] that his policies amounted to a "raid" on working people with a two-year extension to the freeze on income tax thresholds.
"It's not possible to raise £25 billion of taxes just focusing on a very small group of very rich people and I'm being very open about that," the Chancellor claimed.
He also admitted Treasury officials had not provided a figure on how much tax would be raised from abolishing the controversial non-dom status.
The arrangement - once held by Rishi Sunak's wife - allows wealthy UK residents to pay no tax on their overseas income.
The Chancellor said on Friday scrapping the status would be the "wrong thing" to do and claimed: "Like me they [officials] wanted to be very sure they weren't doing things that damaged the UK's attractiveness".
Labour's Shadow Chief Secretary to the Treasury Pat McFadden hit back saying the Conservatives were refusing "to make fairer choices".
"They continue to shield non-doms from paying their fair share of tax in Britain, leaving billions on the table," he said.
Ed Davey, the Liberal Democrat leader, said: "People's living standards are falling off a cliff and public services are suffocating under the weight of this Conservative chaos and incompetence.
"Conservative ministers are responsible for economic vandalism on a scale never seen before in British history. Never has a party been so unfit for Government".
Find out six nasty surprises in the Autumn Statement documents: Follow Mirror Politics on TikTok here.
