Nearly half of UK households see no benefit from economic growth, PwC finds

A new analysis from PwC has laid bare a troubling reality about British prosperity: nearly half the country's households live in places where the economy is growing but their own lives are not getting better. The consultancy examined spending power—the money left after taxes and housing costs—across regions and found a stark divide that splits the country almost in two.

In every region north of the Midlands, and across Wales, households have less to spend than the national average. The North East falls 6.6% short, costing families £1,542 a year. The North West loses £1,493 annually. But Yorkshire and the Humber are hit hardest: residents there have £1,917 less spending power than the average British household. Meanwhile, the South East sits 9% above the national average, worth an additional £2,154 a year, and London follows close behind. The gap is not merely regional—it is a chasm that divides the country into winners and losers of growth.

What makes this finding particularly sharp is that it exposes a fundamental disconnect between economic expansion and lived experience. When the economy grows, the theory goes, businesses invest, jobs appear, wages rise, and tax revenues climb. Everyone should feel richer. But PwC's research shows that only a fraction of GDP growth actually translates into increased spending power for households. The UK economy expanded by 1.2% in the first half of this year, yet that growth has not reached most people in the north.

Even within prosperous regions, the disparities are jarring. London, often held up as the engine of British wealth, contains both Richmond—where average annual disposable income reaches £35,448—and Hammersmith and Fulham, where it sits at £18,384. Two neighbourhoods separated by a river, yet their residents' financial reality nearly doubles between them. The South East, too, shows similar fractures. Housing costs in the south are higher than in the north, but that burden is cushioned by higher incomes; in the north, there is no such cushion. Scotland and the South West buck the trend slightly, their lower housing costs and smaller household sizes pushing them marginally above the national average.

Prime Minister Andy Burnham has made tackling these regional inequalities central to his agenda, pledging to create conditions for growth in every postcode. His strategy hinges on devolution—transferring power and resources from Westminster to local authorities so they can keep more of the money their economies generate and decide how to spend it. The government has announced unprecedented financial powers to English mayors, allowing them to receive a share of income tax revenues. A government spokesperson framed the creation of No10 North as part of a broader growth mission that would reshape how the country operates.

But the path forward is constrained. Rising government borrowing costs are tightening the fiscal space available to Burnham ahead of October's Budget, limiting his room to redistribute growth or invest in struggling regions. The Conservative opposition has been blunt in its skepticism. Leader Kemi Badenoch has dismissed Burnham's diagnosis as fundamentally flawed, arguing that government spending alone does not create wealth. She has called the establishment of No10 North a gimmick.

PwC's researchers argue that success should not be measured simply by whether local economies grow, but by whether that growth leads to greater prosperity, wider opportunity, and better lives for the people within them. By that measure, Britain is failing. Nearly 12.5 million households—46% of the country—live in areas where the economy is expanding but their own spending power is shrinking or stagnant. The question now is whether devolution, constrained by borrowing costs and contested by opposition, can actually change that.