The current economic slowdown has created huge regional economic disparities in Britain with Wales, the West Midlands and Yorkshire facing the worst impact, reports Pricewaterhouse Coopers. Though the unemployment rate and other growth indicators are negative for London, the city has fared better compared to the other regions.
Stagnant wage growth, rising taxes, public sector cuts and personal insolvencies are adding the pressure on people, says the accounting firm in their Regional Household Financial Stress Index.
"Our research also highlights how different London's experience of the recession has been from the rest of the economy. London performs worse than many other regions on measures such as unemployment rates, but our index demonstrates that the impact of the recession on household financial stress has been less in London than in other regions," said John Hawksworth, chief economist at PwC.
Among the regions, London reports strong earnings growth, steady housing price and lowest incidents of personal insolvencies. The North-East and Wales have suffered the greatest household financial stress since the economic slowdown, followed by West Midlands.
The prospects of economic growth are strong for London, the South-East and the East Midlands, while the North-East faces slower recovery.
PwC also put their outlook for economic growth lower at one percent for 2011 and 2012. They are expecting no significant growth in consumer spending in the coming year and a further rise in unemployment as public sector job cuts outweigh private sector job gains.