Next year will be highly challenging for UK workers as wages fall back to 2006 levels, according to a global survey by consulting firm PwC.
2023 will also bring a slide in house prices and an increase in divorces, with wages adjusted for inflation falling below those in France.
PwC said average real wages in the UK would fall from a peak in 2020 of £36,330 to £34,643 next year.
In France, where inflation has been lower, real wages will only slip back from £35,848 in 2021 to £35,462 in 2023.
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Higher taxes will also make the cost of living more difficult for many, according to PwC, as the government freezes tax thresholds again from next April.
These factors, combined with rising unemployment, mean the main measure of life satisfaction in the UK will slump to its lowest level since PwC began measuring in 2013.
The happiness index will drop from a peak of 7.7 in 2019 to 7.3 in 2023, it said.
Barret Kupelian, senior economist at PwC, said “it is not surprising that these chilly headwinds will continue throughout 2023, bringing with it some unwelcome milestones in terms of economic and social wellbeing measures”.
Inflation is predicted to fall towards the end of 2023, he added, which would stabilise the outlook for the global economy.
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Earlier this month, analysis by XpertHR found that median pay awards had reached 5%, the highest in 31 years, but rising levels of inflation still meant that most employees suffered a real-terms pay cut.
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