Real living standards are STILL expected to fall by over 5% over the next two years - the largest decline since records began in the 1950s.
The grim forecast from the Office for Budget Responsibility (OBR) came as the Chancellor Jeremy Hunt unveiled his Budget for "growth".
Speaking in the Commons he said inflation is forecast to fall to 2.9% by the end 2023 while the UK economy will swerve a "technical recession" in 2023.
In the final quarter of 2022 inflation stood at a staggering 10.7% after the disastrous mini-Budget and failed PM Liz Truss's 49-day stint in No10.
But the OBR warned moments later: "Real household disposable income per person - a measure of real living standards - is expected to fall by a cumulative 5.7% over the two financial years 2022-23 and 2023-24.
"While this is 14 percentage points less than forecast in November, it would still be the largest two-year fall since records began in 1956-57."
The watchdog said the fall reflects the rise in energy prices "and other tradable goods of which the UK is a net importer, resulting in inflation being above nominal wage growth".
It added that living standards are still 0.4% lower than pre-pandemic levels - slightly better than forecast in November in the wake of the disastrous mini-Budget.
Billed as a "back to work" Budget - in attempt to persuade people back in the workforce - the Chancellor also announced a significant expansion of childcare provision.
Unveiling his rabbit from the hat, Mr Hunt announced £4billion of funding for free childcare for all under-5s in England - but it won't be rolled out in full until 2025.
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Just hours before the Chancellor stood up in the Commons the Treasury announced it would delay a £500 rise in already sky-high energy bills.
The Energy Price Guarantee was due to rise from its current level of £2,500-a-year for a typical household to £3,000 in April - despite the ongoing cost-of-living crisis.
But the Government announced the hike would be cancelled amid intense political pressure and warnings it would push 1.7million more people into fuel poverty.
Mr Hunt also told MPs he would end the prepayment "premium" - a system whereby those on pay-as-you-go meters are charged more than direct debit customers.
The Treasury estimates the policy will cost around £200million - but will save households using pre-payment meters around £45 a year.
But all consumers will still face having to find an extra £67 a month when the Government withdraws the Energy Bill Support Scheme next month.
Labour leader Keir Starmer said 13 years of Tory government had led to a "doom loop of lower growth, higher taxes and broken public services" and accused them of "cynically" ducking decisions.
He told MPs: "A year of stagnation. Growth non-existent. According to the IMF, the worst performing country in the G7 this year, a prediction today confirmed by the OBR (Office for Budget Responsibility), growth downgraded in years to come.
"This is a failure you can measure not just in the figures but in the empty pockets of working people right across the country. 13 years without wage growth. 13 years no better off. 13 years stuck in a doom loop of lower growth, higher taxes and broken public services."
He said the OBR had made clear "things don't look any better in the long run".
He added: "A broken labour market holding back our prospects, seven million on the NHS waiting lists, ill-health and disability on the rise. And the consequences, as we've just heard, deferred to the future.
"The classic short-term sticking plaster cycle. Decisions cynically ducked today. Pain for working people tomorrow. It doesn't have to be like this."
The Liberal Democrat Leader Ed Davey said:“This Budget shows the Conservative Party is so out of touch they might as well be living on another planet.
“Jeremy Hunt and Rishi Sunak had a chance to show they care about the cost-of-living crisis that’s hitting millions of Britain’s families and pensioners but they failed miserably.
