Almost half of households do not see benefits of economic growth, report says
Analysis has found a "stark" gap in the spending power of households in the north and south of England on average.
A recent report reveals that nearly half of British households reside in areas where economic growth does not contribute to a higher quality of life, with a significant North-South divide in household spending power. PwC's findings indicate that the North, Midlands, and Wales all have lower spending power than the national average, while London and the South East exceed it.
Prime Minister Andy Burnham has vowed to address cost of living issues and regional inequalities to enhance living standards, but questions remain about his economic policies due to rising UK government borrowing costs, which may affect public spending decisions.
The report, released on Thursday, states that 12.5 million households, or 46% of the population, live in regions where economic growth, typically indicated by increased business investment and job opportunities, does not lead to improved living standards. Households in the northeast of England have a spending power 6.6% below the national average, equating to £1,542 less annually. The north west experiences a £1,493 reduction, while Yorkshire and the Humber suffer the most, with spending power down £1,917.
Conversely, households in the South East have a spending power 9% above the national average, amounting to an additional £2,154 per year. Household spending power serves as an indicator of whether economic growth is improving living standards, calculated by considering income after taxes and housing costs, as well as household size and composition.
Despite years of weak growth, the UK economy expanded by 1.2% in the first half of this year. However, the benefits of growth often take time to materialize and may not uniformly benefit everyone. PwC's research highlights that while there is a clear divide in spending power between regions, instances of disparities within so-called better-off areas, such as London and the South East, exist.
For instance, Richmond's average annual disposable income is nearly double that of Hammersmith and Fulham.
Written by urgent.news from BBC Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
