The IFS says the 2020s are set to be the worst decade on record for growth in household incomes. Its verdict adds to the Resolution Foundation's criticism of the Chancellor John Healey's Budget.
Helen Miller, the IFS director, said temporary cost-of-living packages would not solve the problem. "No amount of temporary cost of living packages will fix that. We need a stronger economy," she said, according to City AM.
The Independent reports that the IFS also warned the reduced headroom against the fiscal rules could leave the country "more exposed to future bad news".
Resolution Foundation research reported by City AM puts the rise in real household disposable income at 1.4% across the 2020s. The rise was 28% in the 1990s, 18% in the 2000s and 14% in the 2010s. On those figures the 2020s show by far the weakest growth of the four decades, which is consistent with the IFS verdict.
Ruth Curtice, the foundation's chief executive, called the income outlook "catastrophic". She said the Chancellor "got lucky" because forecasts on the fiscal problems were kinder than economists had expected. "It was a relatively small Budget and arguably one that did not live up to the scale of the challenges," she said.
Greg Thwaites, a Resolution Foundation economist, called the £100 energy payment "terribly badly targeted".