46% of British households see no benefits from economic growth, report finds

Almost half of households in Britain do not benefit from economic growth, according to a new report from consultancy firm PwC. The study reveals that 46% of people live in regions where economic expansion does not translate into improved living standards. This disparity is particularly pronounced in a stark North-South divide, with areas in the north of England, the Midlands, and Wales lagging behind London and the South East in household spending power.

The release of the report comes as Prime Minister Andy Burnham emphasizes the need to address the cost of living crisis and regional inequalities. His administration faces challenges, particularly with rising government borrowing costs that may limit public spending options. The urgency of these issues has intensified as many households struggle to see any tangible benefits from economic growth, which is often measured through increased business investment and job creation.

The report highlights that households in the North East have a spending power 6.6% below the national average, resulting in an annual shortfall of £1,542. The North West and Yorkshire and the Humber face similar struggles, with spending power down £1,493 and £1,917, respectively. In contrast, households in the South East enjoy a spending power that is 9% above the national average, translating to an additional £2,154 each year. This disparity in financial health underlines the growing concern about how economic gains are distributed across different regions.

As the UK economy expanded by 1.2% in the first half of this year, the report suggests that while overall growth is essential, it does not guarantee improved living conditions for all. The findings reveal that mere increases in GDP result in only a fraction of benefits reaching household spending power. Rachel Taylor of PwC noted the significant variations in prosperity across the UK, emphasizing that the differences are not just regional but also occur within affluent areas. This uneven distribution of economic benefits raises important questions about the effectiveness of current policies aimed at ensuring a more equitable economic landscape.