Families will have to wait FIVE years for their spending power to return to pre-pandemic levels

Families in Britain will have to wait FIVE years for their spending power to return to pre-pandemic levels, experts warn

  • Richard Hughes said incomes would start to recover in next three to four years 
  • But he said it would take longer to bounce back to levels seen before Covid 

Families will have to wait five years for their spending power to recover to pre-pandemic levels, the head of the Treasury watchdog warned yesterday.

Richard Hughes, chairman of the Office for Budget Responsibility (OBR), told the BBC that incomes would start to recover in the next three to four years but added that it would take longer to bounce back to levels seen before the onset of Covid-19 in early 2020.

‘It’s still the case that people’s real spending power doesn’t get back to the level it was before the pandemic even after five years, even by the time we get to the late 2020s,’ he said.

He claimed that Brexit had contributed to the UK’s struggles, saying it had caused economic damage on the same ‘magnitude’ as the pandemic and the recent surge in energy prices.

He estimated Britain’s overall output has reduced by ‘around 4 per cent compared to had we remained in the EU’.

Richard Hughes (pictured), chairman of the Office for Budget Responsibility (OBR), told the BBC that incomes would start to recover in the next three to four years but added that it would take longer to bounce back to levels seen before the onset of Covid-19 in early 2020

Levelling Up Secretary Michael Gove (pictured), asked if he agreed with the OBR’s assessment of living standard forecasts, admitted the UK was poorer but blamed the pandemic and the Ukraine war rather than the performance of the Government

Levelling Up Secretary Michael Gove (pictured), asked if he agreed with the OBR’s assessment of living standard forecasts, admitted the UK was poorer but blamed the pandemic and the Ukraine war rather than the performance of the Government

This view was rejected by eurosceptic economist Julian Jessop, who said damage from Brexit had been ‘the OBR’s assumption for a long time’. ‘That’s all it is – an assumption. It is based on comparing estimates about the long-term economics of two shocks that will almost certainly be wrong. I would not give it much weight if any at all,’ Mr Jessop added.

Levelling Up Secretary Michael Gove, asked if he agreed with the OBR’s assessment of living standard forecasts, admitted the UK was poorer but blamed the pandemic and the Ukraine war rather than the performance of the Government.

He conceded that ministers could ‘always do better’, but denied the situation was because of decisions made during the Conservatives’ 13 years in power.

***
Read more at DailyMail.co.uk