PwC said economic growth is still not improving living standards for the equivalent of 12.5 million households, or 46%, across Britain. The report lands as official figures show the UK economy expanded by 1.2% in the first six months of this year, but that gain has not reached large parts of the country in the same way.
PwC measures household spending power by looking at income after taxes and housing costs, while also taking account of household size and makeup. That measure put every region in the north of England, Midlands and Wales below the country's average, while London and the South East sat above it.
Rachel Taylor on regional gaps
Rachel Taylor, PwC's government and health industries leader, said: “The research shows just how differently prosperity is experienced across the UK, with stark variations not only between regions but on each other's doorstep”. Her point matches the report's spread of outcomes: households in the north east of England had 6.6% less spending power than the national average, or £1,542 less a year.
PwC also said households in the North West had £1,493 less spending power a year than the national average, while households in Yorkshire and the Humber had £1,917 less. At the other end, households in the South East had spending power 9% above the national average, equal to an extra £2,154 a year.
Britain's spending power divide
The report put Richmond's average annual disposable income at £35,448, compared with £18,384 in Hammersmith and Fulham. Scotland and the south west of England were slightly above the national average, which PwC linked to lower housing costs and smaller households.
That leaves the practical question for local readers: growth alone is not closing the gap if local spending power stays pinned to housing costs, household size and the share of income left after tax. PwC's next-policy ask is a further phase of devolution that would let local areas keep more of the revenues generated by local growth and decide more freely how to use them.
