Speaking of the tax changes unveiled in the chancellor's statement yesterday, Paul Johnson says he saw "no sense of strategy".

He acknowledges Chancellor Jeremy Hunt was "hemmed in" by issues including "dreadful growth prospects", meaning that Hunt "put off" the tough decisions.

The economist concludes by saying the UK is "reaping the costs of a long-term failure to grow the economy, the effects of an ageing population, and high levels of past borrowing".

Johnson says the country "just got a lot poorer" and is in for a "long, hard, unpleasant journey" - one that has been worsened by a "series of economic own goals" which Hunt "appears to have recognised".

People on middle incomes will feel "the biggest hits", says Paul Johnson, the director of the Institute for Fiscal Studies think tank.

He says this group won't benefit from targeted support that will be received by those on means-tested benefits - meanwhile their wages are falling, and their taxes and housing costs are rising.

"Middle England, I think, is set for a shock," he says.

He adds this follows "a painful decade and more" during which incomes have hardly risen.

"On some measures, it looks like we will be an astonishing 30% worse off than we might have expected had pre-financial crisis trends continued."

Image source, IFS/YouTube

Continuing with his analysis, IFS director Johnson adds criticism of some of the government's plans.

"It is awful that the social care reforms will not now be implemented next year as planned," he says, alluding to a two-year delay to a cap on care costs. He fears the postponement could spell a "death knell" for these changes.

"Government should not be making and then reneging on promises like this which matter so much to vulnerable people," he says.

Johnson goes on to suggest that forecasts of a "staggering" increased government spend on incapacity and disability benefits spells "an astonishing and really quite worrying trend if true".

He says it relates to an issue of people dropping out of the labour market.

At the same time, Johnson says, a delay to move out-of-work benefits claimants onto Universal Credit "looks horribly like an effort to push a relatively small increase in spending to beyond the forecast horizon".

Paul Johnson of the Institute for Fiscal Studies (IFS) think tank is giving further reaction to yesterday's Autumn Statement - suggesting the UK appears to have entered a "new era of higher taxation".

He says: "I would be most surprised if the tax burden gets back down to its long term pre-Covid average at any time in the next several decades."

More now from Martin Lewis, campaigner and founder of Money Saving Expert, who says the "honest truth" is that people need to be looking at their finances to budget and plan for next spring.

"You should be budgeting and planning now for next year, seeing what room you've got and making sure you're being as efficient as you can on everything."

He told ITV's Good Morning Britain: "If you're not getting help, this is the time to look at your own finances and see what you can do to shimmy and shape them into a little bit better style.

"It won't solve everything, but it might make things a bit easier."

Image source, Getty Images

One thing that business bosses have pointed out is that the chancellor did not set out how exactly he would help firms with energy bills beyond next April.

Speaking on BBC Radio 4's Today programme, Will Butler-Adams, the boss of folding bike maker Brompton Bikes, said that for businesses, what help was in store was still not clear.

"If we jump back on to standard tariff, we face an increase in our energy bill of £1.5m a year.

"That will have a big impact on our business - it will impact how we invest, how we recruit and how we decide to run our business."

He added he thought the chancellor had a "pretty hard message to get across yesterday", but that not having clarity "makes our lives a bit more difficult".

"We have problems right across the board and problems across the economy, so we're all going to take a hit in some way shape or form. But what we need is to take that hit over a number of years - and for it not to hit us straight between the eyes."

Poverty-focused think tank the Resolution Foundation has issued a fresh warning over the UK's economic picture.

It says a forecast provided yesterday by the Office for Budget Responsibility (OBR) heralded "the biggest deterioration" in such forecasts since the OBR was set up in 2010 to scrutinise the government's budget plans.

The Resolution Foundation blames high inflation and high interest rates (which have been introduced in an attempt to tackle the inflation issue).

Turning to expected spending cuts for government departments, the think tank's research director says these "don't look obviously deliverable" and appear to suggest "really big falls" in unprotected departments.

Those departments face the levels of austerity seen in 2014-15, he adds.

The report put out by the Office for Budget Responsibility (OBR) yesterday is more optimistic than the economic projections shared by the Bank of England.

The chairman of the OBR, Richard Hughes, said this was due to a belief that households will dip into their savings to support their spending.

"Our forecast is in line with other forecasters and the bank is more of an outlier on the downside," he said.

"One reason we are more optimistic is that lots of households built up savings during the pandemic - we believe households might draw down on these to fill the gap."

Image source, Getty Images

UK retail sales increased in October, but remain below pre-pandemic levels as the soaring cost of living hits households, according to official figures.

Sales volumes rose by 0.6% following a 1.5% drop in September, the Office for National Statistics (ONS) says.

The rebound followed weak sales in September due to shops being open for fewer hours or closing for Queen Elizabeth II's funeral, it adds.

But with the current inflation rate at 11.1%, economists suggest the latest uptick in sales will not continue.

The ONS said petrol and diesel sales rebounded in October and non-food stores sales increased, though both remain well below February 2020 levels.

However, the rebound was not seen by food stores, which saw sales drop.

Read the full story here.

As people take stock of the effect yesterday's Autumn Statement will have on their finances, Chancellor Jeremy Hunt has been defending his measures this morning.

Asked whether it would disproportionately "squeeze" middle earners, he told BBC Radio 4's Today Programme we were "facing into a storm" and his economic package was "balanced".

Martin Lewis, campaigner and founder of Money Saving Expert, says middle earners are going to feel the biggest adverse impact on their finances following yesterday's Autumn Statement.

"I was relatively relieved that we saw the uplifting of those who are the poorest in society," he told LBC Radio this morning.

But he added: "Clearly the people who bear the brunt on this, we're going to have a squeezed middle."

By the end of last year, the Office for National Statistics (ONS) estimated that the median household disposable income, external in the UK was £31,400.

Lewis explained people in the middle will receive £400 in energy payments this year, but not next year, meaning they will see a rise of around 41% on energy bills that have already doubled this year.

"That is just an enormous whack," he said. "That is why it's people in the middle who are really going to feel the squeeze."

The chancellor has been speaking to the BBC this morning, defending the plans for tax rises and spending cuts that were outlined in his Autumn Statement yesterday. Here's a quick summary:

• Jeremy Hunt acknowledged that there were "very difficult times ahead" for people, but said his plans gave people "certainty" on how the government would help them through the recession
• He said he was not deferring hard decisions - pointing to newspaper front pages that splashed on his plans to hike taxes. But he also denied raiding the pockets of working people, insisting that his Autumn Statement represented a "balanced package"
• Hunt said the government had yet to make a decision about raising fuel duty
• The chancellor said he regretted having to delay a cap on social care costs by two years
• On the question of non-dom tax status, he said he was not given any information by the Treasury to suggest this would have been beneficial for the economy
• He added he had "great confidence" the UK would be able to remove trade barriers with the European Union - but said rejoining the single market was the wrong way to promote growth

And here's what the opposition are saying:

• Shadow Chancellor Rachel Reeves argued "fairer choices" could have been made in the Autumn Statement - saying the government should have asked those with the "broadest shoulders" to pay more
• She urged the government to "urgently" stimulate economic growth which would result in a "better outlook" and higher living standards ahead of the next election
• The SNP's Westminster leader Ian Blackford accused the chancellor of making "political choices" to cut public spending. He suggested the government could have gone further with its windfall tax on the oil and gas industry, and chosen to tax those with non-dom status

Image source, .

For more details, check out our full guide to the Autumn Statement here.

You can also see what the chancellor's plan means for you here.

Find out much more on our politics and business pages.

Image source, Getty Images

Finally, Hunt is asked about the UK having the worst performance compared to pre-pandemic levels in the G7.

He says he disagrees with that statement and that "statistics can be cut in lots of different ways" - but the most important thing is future growth.

Hunt reiterates that the Office of Budget Responsibility said the UK's growth will be 2-3% after the recession, and says that focusing on long-term prospects is important - though he recognises many people will be concerned about the difficult period right ahead.

"But the message from the chancellor today is that we are doing the things that will make a big difference over the long term... We're prepared to take the difficult decisions to get there."

The chancellor admits it was a "source of great regret" to delay capping costs on social care - something that has seen the government accused of kicking the can down the road.

Hunt says he does believe in reforms championed by economist Sir Andrew Dilnot.

He says the postponement of a cap means the government can increase funding to local authorities by £4.7bn - which he describes as "the biggest ever increase in social care".

He insists the plan for a cap on care costs is "not disappearing into the ether".

The chancellor is now asked whether membership of the single market would boost growth, to which he says he has "great confidence" that in the years to come, Britain will be able to remove trade barriers with the EU, although this will take time.

Hunt says he doesn't think rejoining the single market would be the "right way" to boost growth as "it is not what people voted for" with Brexit, as being part of the single market also entails re-establishing the free movement of people.

Next he is quizzed on whether the government has shelved its plans to reduce net migration - with Mishal Husain pointing to assumptions written in independent economic forecasts about the number of people coming to the UK remaining above 200,000 per year.

In his answer, Hunt stresses the importance of bringing down numbers and upskilling UK workers, while acknowledging that skilled migrants are "important for the economy".

On the issue of non-dom tax status, Hunt says he wants foreigners to "spend money in Britain" as that supports jobs in the UK.

Questioned about whether he asked the Treasury to look into how much revenue abolishing the non-dom tax status could bring in for the government, Hunt says he is "constantly" looking at such measures, but tried to "avoid damaging long-term growth".

He adds the Treasury was "unsure" about the real savings that abolishing the non-dom tax status would bring and that they didn't give a figure at all. "The Treasury did not tell me it would help the economy to do this," and such a measure would "damage the long-term attractiveness of the UK".

Hunt confirms he doesn't think abolishing the non-dom tax status would make sense economically even though it might have been a good thing politically.

He denies he is protecting wealthy people: "In the end, sound money matters more than low taxes."

Image source, PA Media

The new plans give people "certainty", says Jeremy Hunt in a further defence of yesterday's Autumn Statement.

Speaking to BBC Radio 4, he denies that planned tax rises amount to a raid on working people.

He says he's come up with a "very balanced package", insisting that decisions were made in a "fair way".

The chancellor says it simply wasn't possible to raise £25bn simply by taxing the wealthiest.

The chancellor is appearing on BBC Radio 4 next.

You can listen to him on the Today programme here in a few moments - or stay on this page for further updates.