Business & Finance
Nearly half of UK households live in areas detached from economic growth, PwC finds
A study reveals significant regional spending power gaps across Britain despite recent growth in the national economy.
The short version
- A PwC report estimates that 46% of British households (around 12.5 million) live in areas where economic growth does not lead to improvements in living standards.
- A strong geographic divide persists, with household spending power falling below the national average in northern England, the Midlands, and Wales, while London and the South East remain above average.
- Prime Minister Andy Burnham has advocated for devolution and tax revenue sharing for local leaders to reduce inequality, drawing criticism from Conservative leader Kemi Badenoch over government spending models.
- Rising UK borrowing costs pose an ongoing uncertainty for future public spending and policy implementations.
Key facts
- PwC reported that 12.5 million British households live in regions where economic expansion does not translate into better living conditions.[BBC News]
- Spending power in Yorkshire and the Humber is £1,917 below the national average, the North East is £1,542 lower, and the North West is £1,493 lower.[BBC News]
- Households in the South East have spending power 9% above the national average, amounting to an extra £2,154 annually.[BBC News]
- Official figures indicate the UK economy expanded by 1.2% in the first half of the year.[BBC News]
- The government has announced plans to allow English mayors to retain a portion of income tax revenues to stimulate local growth.[BBC News]
What remains uncertain
- The degree to which surges in UK government borrowing costs will constrain future public spending and regional policy plans remains unknown.[BBC News]