38. Weekly Newsletter
UK income gap
Data published by the Office for National Statistics (ONS) this week showed that the income gap between London and the rest of the UK has reached a record disparity. National income in the UK is at £21,679, however the disparity between the UK as a whole and London is massive as in London the average income is 43% higher at £31,094. Wealth disparity between the UK’s capital and the rest of the UK has existed since records began in 1997. Even in 1997, London’s gross disposable income per capita was 22% higher than the national average but this has continued to rise over time. This geo-spatial wealth disparity is not only apparent historically but even compared to the rest of Europe; the gap is exceedingly large. For example, the disparity in income between Stockholm and the rest of Sweden is approximately 8.7% and in Paris the average income is 9.8% higher than national average. This major disparity is in spite of the UK governments flagship £4.9 billion levelling up fund designed to back projects across the UK and improve the economic landscape at a more local scale. A recent report by the Institute for government found that it had “stalled” under the leadership of Rishi Sunak but has been denied with absolutely certainty as being “untrue”.
The UK’s front page news cycle over the last seven days covered a wide range of topics, with no single issue dominating the headlines. Further concerns have arisen over the success of HS2, as the high-speed railway line to Manchester looks to be axed in order to cut costs. Furthermore, UK residential rents have risen at a record pace in the last month, adding further pressure on the general population during the cost-of-living crisis. Some of the newspaper front pages from last week were:
- Financial Times – HS2 route north of Birmingham in doubt as Sunak and Hunt explore more cost-cuts
- Financial Times – Number of people aged 100 or over in England and Wales hits record high
- Sunday Telegraph – Fresh blow for the City of London as British Apple supplier snubs LSE
- Sunday Telegraph – Bank of England risks interest rates ‘overdose’ as economy shrinks
- The Times – Security fears – ‘Chinese spy’ spent 18 months in Commons unvetted
- Financial Times – Miami firm 777 Partners agrees to buy Everton FC
- The Guardian – AI boom may not have positive outcome, warns UK competition watchdog
- The Guardian – Number of firms in England and Wales going bust in August rises by a fifth
- Financial Times- BoE expected to raise interest rates to 5.5
Data has come out which shows that residential rents have increased by 12% on average in the UK compared to around this time last year. The average has jumped to £1,304 per month with London leading the increase with a 17% rise to £2,332 a month. This means the tenants in London have experienced double digit rise in rent for “16 out of the last 18 months” costing the median London tenant 30% of their gross income. Sadiq Khan, London Mayor, has urged for immediate action and stated, “The national crisis in the rental market clearly demands further action from government”. Sadiq Khan has urged government to give him the powers to freeze rents in London, however both Labour and Conservatives have indicated that they are unlikely to introduce such measures to impose rent controls as historically they have not worked effectively enough. The crisis looks likely to continue to mount further pressure on the government as rents in Britain have increased more in the last year than between 2015-2019.