The UK is poorer as a country, says Michael Gove

The UK is poorer than it would person been, partially owed to the warfare successful Ukraine, but besides the pandemic, Levelling Up Secretary Michael Gove has admitted.

But helium said ministers were taking enactment connected the soaring outgo of living, including giving assistance connected vigor bills.

The caput of the autarkic forecaster, the Office for Budget Responsibility (OBR), said surviving standards were seeing their biggest compression connected record.

Richard Hughes said Brexit and mediocre productivity had besides wounded growth.

And helium warned surviving standards would not instrumentality to pre-pandemic levels for astatine different 5 to six years.

Asked whether helium agreed with the OBR's assessments, Mr Gove said economical forecasting was "a precise hard exercise". He added that the UK was dealing with "the aftershocks of 2 important events".

"[There's] some the warfare successful Ukraine, the archetypal clip we've had warfare connected this standard connected the continent successful Europe since the Second World War, and the Covid pandemic, the biggest planetary wellness pandemic since the extremity of the First World War," helium told the BBC's Sunday with Laura Kuenssberg programme.

"They person had a immense effect connected our system and connected others' economies."

Mr Gove denied that the authorities was to blasted aft 13 years successful power, but added: "One tin ever bash better, yes."

However, helium insisted ministers were taking enactment to code soaring ostentation - the complaint astatine which prices emergence - by taxing lipid and state firms' profits and lowering household vigor bills.

He besides said the Budget had taken steps to assistance radical backmost to enactment and to assistance families, including with childcare.

The OBR forecasts that ostentation volition autumn beneath 3% this twelvemonth - down from 10.4% presently - arsenic nutrient and vigor prices emergence little quickly.

But speaking connected the aforesaid programme, OBR president Richard Hughes said the outlook was volatile fixed Britain was a nett importer of nutrient and vigor - the prices of which were acceptable successful planetary markets.

Mr Hughes added that the longer word outlook for the system was bleak, with people's existent spending powerfulness - allowing for ostentation - not forecast to retrieve to pre-pandemic levels until the extremity of the decade.

Mr Hughes blamed a scope of issues for holding backmost the economy, saying: "We've mislaid astir 500,000 radical from the labour force, we've seen stagnant concern since 2016 and besides our productivity has slowed dramatically since the fiscal situation and not truly recovered."

He besides said that wide output was forecast to beryllium 4% little than it would person been arsenic a effect of leaving the EU.

Last week the Bank of England enactment up involvement rates for the 11th clip since December 2021 arsenic it continued its conflict to easiness inflation.

The determination to assistance rates to 4.25% from 4% came aft the ostentation complaint roseate unexpectedly past period to 10.4%.