A report by consultancy firm PwC indicates that nearly half of households in Britain do not experience the benefits of economic growth, revealing a significant North-South divide in household spending power. The report, released on September 2, 2026, states that 46% of households, or approximately 12.5 million, live in areas where economic growth does not lead to improved living standards. Regions in the north of England, the Midlands, and Wales report lower spending power compared to the national average, while London and the South East are above average.
Specifically, households in the North East have spending power 6.6% below the national average, equating to £1,542 less annually. The North West is £1,493 below average, and Yorkshire and the Humber report the lowest spending power, down £1,917. In contrast, households in the South East enjoy spending power 9% above the national average, translating to an additional £2,154 per year.
PwC measures household spending power by assessing income after taxes and housing costs, considering household size and composition. While the UK economy grew by 1.2% in the first half of the year, the report emphasizes that economic growth does not uniformly benefit all households. It notes that only a small portion of GDP growth translates into increased spending power.
The report also highlights disparities within regions, such as Richmond, where the average disposable income is £35,448, nearly double that of neighbouring Hammersmith and Fulham at £18,384.
The report advocates for the devolution of power from central government to local authorities, suggesting that local areas should retain more revenue from local growth and have greater autonomy in resource allocation. It argues that the success of devolution should be measured by whether economic growth leads to improved prosperity and opportunities for communities.
In response to the report, Prime Minister Andy Burnham has emphasized the need to address cost of living and regional inequalities. A government spokesperson noted the establishment of No10 North as part of its growth mission, aimed at reshaping governance and enhancing local economies. However, Conservative leader Kemi Badenoch criticized Burnham's approach, asserting that increased government spending does not equate to wealth for all.