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Household finances not set to return to pre-COVID levels until 2023

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The Office for Budget Responsibility (OBR) has warned that household finances are not set to return to their pre-COVID levels until 2023.

In a hearing with MPs, Charlie Bean, a board member for the OBR, stated that incomes are not set to return to their 2019 levels for at least two years.

He said: ‘We don’t have real household disposable income getting above pre-pandemic levels until the back end of 2023, and it’s growing at a pretty mediocre rate from then on.’

Richard Hughes, Chair of the OBR, informed MPs that Chancellor Rishi Sunak may ‘struggle to meet his targets of reducing debt and balancing the budget deficit in three years’.

The OBR recently published its forecast alongside the Autumn Budget. The forecast showed that inflation will adversely affect household incomes over the next two years.