Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

UK is poorer as a country, says Michael Gove

UK is poorer as a country, says Michael Gove

The UK is poorer than it would have been, partly due to the war in Ukraine, but also the pandemic, Levelling Up Secretary Michael Gove has admitted.
But he said ministers were taking action on the soaring cost of living, including giving help on energy bills.

The head of the independent forecaster, the Office for Budget Responsibility (OBR), said living standards were seeing their biggest squeeze on record.

Richard Hughes said Brexit had been similar to the pandemic in its impact.

"It's a shock to the UK economy of the order of magnitude to other shocks that we've seen from the pandemic, from the energy crisis," he told the BBC.

Poor productivity had also hurt growth, he said.

And he warned living standards would not return to pre-pandemic levels for another five to six years.

Asked whether he agreed with the OBR's assessments, Mr Gove said economic forecasting was "a very difficult exercise". He added that the UK was dealing with "the aftershocks of two significant events".

"[There's] both the war in Ukraine, the first time we've had war on this scale on the continent in Europe since the Second World War, and the Covid pandemic, the biggest global health pandemic since the end of the First World War," he told the BBC's Sunday with Laura Kuenssberg programme.

"They have had a huge effect on our economy and on others' economies."

Mr Gove denied that the government was to blame after 13 years in power, but added: "One can always do better, yes."

However, he insisted ministers were taking action to address soaring inflation - the rate at which prices rise - by taxing oil and gas firms' profits and lowering household energy bills.

He also said the Budget had taken steps to help people back to work and to help families, including with childcare.

The OBR forecasts that inflation will fall below 3% this year - down from 10.4% currently - as food and energy prices rise less quickly.

But speaking on the same programme, OBR chairman Richard Hughes said the outlook was volatile given Britain was a net importer of food and energy - the prices of which were set in global markets.

Mr Hughes added that the longer term outlook for the economy was bleak, with people's real spending power - allowing for inflation - not forecast to recover to pre-pandemic levels until the end of the decade.

Mr Hughes blamed a range of issues for holding back the economy, saying: "We've lost around 500,000 people from the labour force, we've seen stagnant investment since 2016 and also our productivity has slowed dramatically since the financial crisis and not really recovered."

He also said that overall output was forecast to be 4% lower than it would have been as a result of leaving the EU.

Last week the Bank of England put up interest rates for the 11th time since December 2021 as it continued its battle to ease inflation.

The decision to lift rates to 4.25% from 4% came after the inflation rate rose unexpectedly last month to 10.4%.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
Italy Faces Population Decline Amid Youth Emigration
Trump Accuses China of Violating Trade Agreement
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Russia Accuses Serbia of Supplying Arms to Ukraine
Gerry Adams Wins Libel Case Against BBC
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
EU Majority Demands Hungary Reverse Anti-LGBTQ+ Laws
Top Hotel Picks for 2025 Stays in Budapest Revealed
Iron Maiden Unveils 2025 Tour Setlist in Budapest
Chinese Film Week Opens in Budapest to Promote Cultural Exchange
Budapest Airport Launches Direct Flights to Shymkent
Von der Leyen Denies Urging EU Officials to Skip Budapest Pride
Alcaraz and Sinner Advance with Convincing Wins at Roland Garros
EU Ministers Lack Consensus on Sanctioning Hungary Over Rule of Law
EU Nations Urge Action Against Hungary's Pride Parade Ban
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
U.S. Considers Withdrawing Troops from Europe
Russia Deploys Motorbike Squads in Ukraine Conflict
Critics Accuse European Court of Human Rights of Overreach
Spain Proposes 100% Tax on Non-EU Holiday Home Purchases
German Intelligence Labels AfD as Far-Right Extremist
Geert Wilders Threatens Dutch Coalition Over Migration Policy
Hungary Faces Multiple Challenges Amid EU Tensions and Political Shifts
Denmark Increases Retirement Age to 70, Setting a European Precedent
Any trade deal with US must be based on respect not threats', says EU commissioner
UK Leads in Remote Work Adoption, Averaging 1.8 Days a Week
Thirteen Killed in Russian Attacks Across Ukraine
High-Profile Incidents and Political Developments Dominate Global News
Netanyahu Accuses Western Leaders of 'Emboldening Hamas'
Ukraine and Russia Conduct Largest Prisoner Exchange of the War
×