The UK's economy is predicted to experience five years of lost economic growth with the most significant impact on the disadvantaged, according to data from the National Institute for Economic and Social Research (Niesr).
The combination of Brexit, the Covid pandemic and Russia's invasion of Ukraine has severely impacted the nation's economic health.
Workers' purchasing power in numerous UK regions is not expected to reach pre-pandemic levels until late 2024. The UK's gross domestic product (GDP) is anticipated to revert to its 2019 levels only by the latter half of the upcoming year.
This prolonged period of subdued growth has exacerbated economic disparities across the country. While real wages in London are projected to rise by 7% by the end of the next year compared to 2019, areas such as the West Midlands might see a 5% decline.
Despite wage hikes, escalating inflation, currently at 7.9%, has intensified the cost-of-living pressures on households. Niesr anticipates inflation to consistently surpass the Bank of England's 2% target until early 2025.
Consequently, real wages, adjusted for inflation, will remain below pre-pandemic levels in many UK regions until the end of the next year.