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UK regions diverge as economic growth fails to raise household spending
PwC estimates 46% of UK households, or about 12.5 million, live in areas where spending power lags the national average, with the north east down 6.6% versus the UK benchmark.
Almost half of households in Britain live in areas where economic growth does not translate into higher living standards, according to a new report analyzed by PwC, highlighting a stark North-South divide in household spending power.
The report said every region in the north of England, the Midlands and Wales had lower spending power than the national average, while London and the South East were comfortably higher. It estimates the equivalent of 12.5 million households, 46%, live where growth seen through business investment and job opportunities is not leading to improved household finances.
Households in the north east of England were found to have spending power 6.6% below the national average, or about £1,542 less per year, while the north west was down about £1,493 and Yorkshire and the Humber were worst off at £1,917 lower than average.
In contrast, households in the South East had spending power 9.0% above the national average, worth an additional £2,154 a year, followed by London. The BBC notes PwC measures spending power using income after taxes and housing costs, and the report suggests only a fraction of GDP gains show up in household spending power.
The findings land as UK Prime Minister Andy Burnham pledged to tackle the cost of living and regional inequalities, though questions remain about how new economic policies could affect public spending as UK government borrowing costs rise. The article also cites official figures showing the economy expanded 1.2% in the first six months of the year.