BRITAIN has suffered the third worst fall in household spending among similar nations since the coronavirus pandemic, a TUC analysis revealed today.
Its analysis shows that the amount British households spent in their local economy fell by 1.4 per cent between the end of 2019 and the third quarter of 2023, equating to £20 billion annually.
Among the 37 Organisation for Economic Co-operation and Development (OECD) nations, only Germany and the Czech Republic experienced a greater drop during this period.
Had household spending kept pace with the OECD average, the British economy would now be at least £84bn a year bigger, the TUC said.
In Britain, households have cut spending by an average of £700 a year since Covid-19 struck.
But if spending had risen in line with the OECD average, British households would be spending £2,900 a year more than before the pandemic.
The TUC blamed the fall in household spending on the government’s failure to deliver growth since the pandemic and on years of economic stagnation.
Britain’s economy is just 1 per cent bigger than before the pandemic, according to official statistics.
This compares with 8.2 per cent for the United States and 4.5 per cent for Canada.
Family budgets have also been hit hard in the last 14 years, with real wages still worth less than in 2008, the body said.
The TUC urged Chancellor Jeremy Hunt to invest in public services and green infrastructure in the forthcoming budget to jump-start growth and set living standards on a positive course over the longer term.
General secretary Paul Nowak said: “People need to be able to spend on their local high streets. But household budgets have been shredded.
“Falling living standards have been both a cause and consequence of poor growth.
“While families in other countries have seen their disposable incomes rise, many here are struggling to cover even the basics.
“This is bad for households and bad for our economy. Lower spending is depressing growth and starving our public services of much-needed revenues.”
Mr Nowak said there was a need for an “economic reset,” adding: “We can’t carry on like this.
“It’s time for a serious long-term economic plan, not sticking-plaster policies.”
