Rachel Reeves has dismissed new analysis which claimed UK living standards will fall over the next five years.
Leading social change organisation, the Joseph Rowntree Foundation, has predicted that British families will be £1,400 worse off by 2030.
According to the findings, lower income households could be £900 per year worse off than they are today, which is a 6% decline in disposable income.
If accurate, it would mean the UK becomes the first government since 1955 to see a decline in living standards across a parliament.
It would also mean Keir Starmer misses his pledge to increase living standards and “put more money in the pockets of working people”.
But, when faced with these bleak predictions on Sky News, Reeves said: “I reject that.”
She continued: “I’m confident we will see living standards increase during the course of this parliament.
“What we’ve already seen in these last few months of the Labour government is a sustained increase in living standards.”
She pointed out that the national living wage is going up by 6.7% in April, which is £1,400 more a year.
The chancellor said: “That’s only possible because of the stability that we have returned to the economy, and of course, three cuts of interest rates from the Bank of England mean mortgage rates are lower than they otherwise would have been.
“We’ve got to do more, absolutely, in terms of raising living standards but this government has already got started for delivering our plan for change.”
Reeves also responded to speculation that the independent watchdog, the Office for Budget Responsibility, is going to slash the UK’s growth forecast this week as her headroom in her spending plans diminishes.
The chancellor said she would not preempt the forecast but noted the “world has changed”, presumably alluding to the growing threat from Russia amid the Ukraine war.
She said: “We’ll respond to the change and continue to meet our fiscal rules.
“But we’re also shaping the new world, whether that’s in the defence and security realm, or indeed on the economy.
“I promised in the general election to bring stability back to the economy. As a result of that stability, interest rates have been cut three times since the general election.
’That’s a far cry from the 11% inflation and the interest rate hikes that we saw under the previous government.”