Almost half of households do not see benefits of economic growth, report says

Almost half of households do not see benefits of economic growth, report says Researchers at PwC found that every region in northern England, the Midlands and Wales recorded below‑average household spending power, while London and the South East exceeded the national average. The findings come as Prime Minister Andy Burnham has pledged to address regional inequalities in order to raise living standards nationwide. However, doubts remain about the feasibility of his plans, given that rising government borrowing costs are expected to limit fiscal maneuver ahead of the October Budget. The PwC study estimates that 12.5 million households, representing 46% of the total, reside in areas where economic growth—typically reflected in rising business investment and job creation—has not translated into higher living standards. Households in the North East of England have 6.6% less spending power than the national average, amounting to £1,542 less per year. In the North West the shortfall is £1,493, while Yorkshire and Humber trail by £1,917. By contrast, households in the South East enjoy 9% more spending power than the national average, equivalent to an extra £2,154 annually, with London showing a similar advantage. Household spending power is widely regarded as a reliable indicator of whether economic growth is raising living standards. PwC calculates the metric by examining income after taxes and housing costs, adjusting for household size and composition to estimate the resources available for other expenditures. The UK has endured years of sluggish growth, yet the economy expanded by 1.2% in the first six months of this year, according to official data. Economic growth normally brings higher consumer spending, more job creation, increased tax receipts and better wages. In theory, this should leave households better off, but the benefits take time to materialise and are not evenly distributed. PwC notes that “only a fraction” of any rise in GDP—the size of the economy—actually translates into greater spending power. Researchers observed a pronounced North‑South divide in household spending power, while also noting significant disparities within more affluent areas such as London and the South East. For instance, Richmond’s average yearly disposable income stands at £35,448—roughly triple the £18,384 recorded in the neighbouring borough of Hammersmith and Fulham. "The probe shows conscionable however otherwise prosperity is experienced crossed the UK, with stark variations not lone betwixt regions but connected each other's doorstep," said Rachel Taylor, authorities and wellness industries person astatine PwC.