THE BLACK community will be left on the brink of skyrocketing costs to live after the  Chancellor confirmed that the UK had plunged into recession. 

Jeremy Hunt unveiled the highly anticipated autumn statement today (November 17) and told the House of Commons that taxes will see the biggest spike in generations for millions, while public services will be slashed.

However, black communities across the country are expected to be hardest hit by the cost surge after a report found that people from African and Caribbean backgrounds are falling the fastest below the poverty line amid the raging crisis.

Black and minority ethnic people are 2.5 times more likely to be in relative poverty, and 2.2 times more likely to be in deep poverty with an income that plummets more than 50% below the poverty line in comparison to their white counterparts, according to the Runnymede Trust. 

The equality group said a “racial lens” was needed to confront the vast inequalities throughout the country. 

Mr Hunt confirmed that the UK was in a steep recession following forecasts by the Office for Budget Responsibility (OBR). The watchdog said the GDP will jump by 4.2% this year before then falling by 1.4% in 2023. It is expected to surge again by 1.3%, 2.6% and 2.7% across three years.

Millions will now endure paying more taxes from their wages with the average earner predicted to stump up nearly £2,500 or more over six years. 

Around £5 billion will be pumped into the Treasury as the £12,570 Income Tax and National Insurance thresholds remain in place until April next year 

Council tax will also surge by 4.99%, but remains capped at 2.99% without a referendum. The Chancellor also announced a hefty £30 billion of spending cuts.

Justin Onuekwusi, a fund manager and economist, told The Voice that the UK is being ravaged by a “triple whammy” of a mortgage shock, the cost of living crisis and “what feels like austerity” that will disproportionately impact black households. 

“When I look at the overall budget [statement], it seems to be evenly split between tax hikes and spending cuts. This is quite important because the spending cuts element means that future growth will be lower,” he warned. “When growth tends to be low, when we go into recession in quarter four [of this year] the poorer communities in the UK fare worse – and in particular ethnic minorities and black people tend to get hurt more when the economy is in recession.”

Onuekwusi added that spending cuts and the impact of a recession will be “devastating,” but also said there was a “glimmer of light” in some of Mr Hunt’s statement.

With black households already plunged into poverty, the surge in energy costs is predicted to leave them worse off. However, the autumn statement detailed how the energy cap will stay at £2,500 over the winter months till April 2023 before prices hike again up to £3,500. 

Mr Onuekwusi also praised how means tested benefits will aid “poorer people” in the UK. Benefits and the State Pension are set to rise in line with the inflation rate at 10.1%, which means that pensions will increase by £18.70 per week, from £185.15 to £203.85.

People over the age of 25 claiming Universal Credit can also expect to see an increase in payments from £335 to £369 per month.

Mr Onuekwusi added: “The triple lock on pensions is remaining which is effectively whichever is higher out of inflation wage increases of 3.5% and it gets the pensions. Inflation is 10.1% at the moment if you look at the Consumer Price Index (CPI) over the last year, this is actually the biggest ever increase in state pension – 10.1% is quite large.”

The national living wage undergo an increase for around two million low-paid workers from £9.50 to £10.42 an hour for employees over the age of 23 – a 9.7% hike and a rise of £1,600 per year for people on low wages. 

Mr Hunt also announced that billions will be pumped into the health and education sectors.

“There will be 2.3 billion invested in schools, there will be 3.3 billion in each of the next three years on the NHS. So there has been an element of money going to poorer communities,” said Mr Onuekwusi.

Rachelle Earwaker, a senior sconomist at Joseph Rowntree Foundation, said the Chancellor had “pledged” to have “compassion and protect the poorest” in society, but condemned his autumn statement for only “partially” dealing with the cost of living crisis on black people.

“Around four in ten black people in the UK are living in poverty, with more than half being in very deep poverty, so some targeted support should reach these people through the benefits system,” she said. “However, the support announced today will only partially offset the huge rise in prices, particularly the cost of essentials such as food and transport, and we also know that both private and social rents will be increasing. For many communities, the cost of living crisis has overlapped with the pandemic and too many are being hit twice over.”

Ms Earwaker added that the eight in ten black households they discovered who had either gone without essentials such as food, heating or basic hygiene products shouldn’t have to wait till spring for help, and as prices skyrocket this is expected to worsen.

“The Government can help by getting help to those who need it most now, to get them through the winter instead of making people wait until April. They must also strengthen our social security system so that everyone can afford what they need to put food on the table and keep a roof over their head,” she said.

Jabeer Butt OBE, CEO of the Race Equality Foundation, said the autumn statement failed to “understand the challenges” Britain’s ethnic minority communities are facing in a post-Covid era. 

“Our work has shown that minority communities emerged from the pandemic poorer and with fewer resources to their name – so their livelihoods are at greater risk of a downturn as a result of the recession,” she said.

“Unfortunately, decisions that have been subsequently made, such as the removal of the £20 Universal Credit uplift, have meant that these communities have been further exposed to the sharp end of the current cost of living crisis. 

She echoed the praise in welcoming funding for some public services and raising benefits in line with inflation, however, slammed how public services won’t be funded to address their “multiple demands” to aid vulnerable communities.

Mr Onuekwusi said he agreed with the need to have a racial lens on “leveling-up” to combat systemic and income inequality in a report by the Runnymede Trust published this year, while black communities stand to be worse affected in the last quarter of 2022.

However, he added that there was “light at the end of the tunnel” amid the financial woes. 

“The big challenge is the tunnel is going to be very long. The recession may last for a lot longer than two quarters. It may last for the whole of 2023 and that’s going to be the big challenge,” he said.

“I think in terms of the budget, it’s been very calming to markets that the government is looking to work out how to balance the budget and that has to be a big positive, because that means less uncertainty – which means that actually there’s a greater chance that the UK can navigate the recession in a much stronger way and come out of the recession a lot stronger.”