The government focuses on labour market reforms and on encouraging business investment to boost growth, but household finances and housing prices are projected to fall.
The Office for Budget Responsibility (OBR) has concluded that the UK’s economic outlook has improved since November. It is no longer forecasting a 2023 recession.
Major measures aiming to lower childcare costs for parents of young children and encouraging business investment have been judged positively by the OBR.
A more positive short-term outlook has not alleviated financial strain for households. Housing prices are now expected to drop by 10% from Q4 2022 and real disposable incomes are not forecast to return to pre-pandemic levels until 2027-2028.